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Why pound is strengthening against dollar

Author : | Published: Thursday, July 5, 2018

The rate of the pound against the dollar has dropped sharply in the black market as prices of fuel also decrease.

One hundred dollars has dropped from 30,000 pounds to 23,000 pounds as of Wednesday evening.

In the fuel stations, a liter of fuel in some station has dropped from 290 to 230 SSP per liter.

“The only reaction came from the oil sector. To check some of the fuel stations – the diesel or the petrol per liter – the price has declined compared to the last prices,” said economist Kimo Aban.

He said the decrease in the rate of the South Sudanese pound may be due to three aspects.

These include the peace process in Khartoum that may have led circulators to bring out dollars that they have been keeping with hopes of stability in the country.

In addition, the Central Bank is currently injecting more hard currency into the commercial banks and forex bureaus and therefore increasing its availability.

This, according to Dr. Aban, will cause a decline in the dollar rate.

However, Dr. Kimo said whatever the case, the prices of commodities will not decline immediately.

“Other commodities have remained the same which gives the impression that the rest of the commodity market is still doubtful about the decline in the price of the dollars,” he added.

The rate of the pound against the dollar shot up after the Ministry of Finance and the Central Bank introduced the floating exchange rate regime in 2015. Since then the rate has been fluctuating with demand and supply.

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