The Bank of South Sudan is unable to regulate operations of commercials banks because of a huge debt it owes them, the Minister of Trade and Industry has said.
Kuol Athian, who appeared before the parliamentary Assembly Business Committee to answer questions over the country’s collapsing economy on Thursday, revealed that the central bank owes commercial banks nearly 100 million US dollars.
“According to what they have told me, the commercial banks say they need money from the central bank – Equity needs about $47 million; KCB, $16 million; Ecobank, $15 million; Cooperative Bank, $10 million dollars; Ivory Ban, $4 million,” he told the lawmakers.
Also summoned by the lawmakers were the finance minister and the governor of the central bank.
The summons came after a report released by the central bank in August, suggesting that it is not able to stock its foreign currency reserves due to scarce revenue from oil sales.
Minister Athian told the parliamentarians that the unregulated money market is partly to blame for the country’s economic woes.
He says the parallel or black market is thriving over the official exchange rate.
This, according to Athian, limits the amount of money in circulation because people prefer to exchange hard currency in the black market where rates are higher.
“There is mistrust between the central bank and commercial banks,” Kuol added.
President Salva Kiir recently established an Economic Crisis Management Committee headed up by the Vice President for Economics Cluster, Dr. James Wani Igga to come up with modalities to improve the economy.
Athian states that the mistrust between the Bank of South Sudan and commercial banks over 30 percent deposits has trickled down to bank customers.
On Thursday, $1 sold at 425 SSP in the black market.