JUBA – The government is saying that it is set to fix the exchange rate of the U.S dollar against the South Sudanese Pound in abides to strengthen the falling economy.
The world’ youngest nation has three exchange rates – one from the central bank, commercial banks, and another from the so-called parallel or unofficial market.
Dier Tong Ngor, Governor of the Central Bank of South Sudan told reporters during a press conference in the bank’s headquarters on Friday that the monetary policy intends to fix the exchange rate in order to stabilize the economy.
“We need to make sure that the prices are at-least stable, and when they are stabled through other measures like increasing productivity or reducing our foreign exchange demand. We can slowly begin to improve things,” Tong told reporters.
The Bank’ Governor believed that the country’ economy has been affected by the drop in prices of oil in the international market because of its dependence on imports from neighboring countries of East Africa.
“We are almost importing everything, and our main source of foreign exchange is oil. If we don’t export oil, we are in big trouble, so we want to influence this exchange rate, and we think if we reduce the liquidity that is available in the market for speculation then it can impact exchange,” Tong said.
“You know, when you have more pounds in the market and less dollars, the rate of SSP will be affected but if you manage the liquidity in the market so that those who are buying dollars for example are not being financed to buy dollars, you can impart the exchange rate. We believe if you impart an exchange rate that will reflect itself automatically on the prices,” he added.