Central bank chief says he will use IMF funding to fix depreciating currency

JUBA – South Sudan’s newly–appointed Central Bank Governor Dier Tong Ngor has said that his country will use the International Monetary Fund’s first financial assistance to South Sudan since it joined the lender in 2012 to stabilize depreciating local currency after its rapid depreciation.

“This facility is given to South Sudan to address a gap, and will be used to address the current challenges we are facing in the market,” Bank of South Sudan Governor Dier Tong Ngor told reporters Sunday in the capital, Juba. “Once the money hits our account, we will embark on intervene in the market.”

The coronavirus pandemic and oil-price shock inflicted severe economic disruption, leading to a sharp decline in the nation’s growth and reversing some early gains from political stability. Disbursement of the $52.3 million emergency assistance approved on Nov. 11 will help finance South Sudan’s urgent balance-of-payments needs and contain the fiscal impact of the shock. It will also provide critical fiscal space to maintain poverty-reducing and growth-enhancing spending, according to the Washington-based lender.

South Sudan’s Monetary Policy Committee raised the benchmark rate to 15% this month amid “rapid depreciation” of the South Sudanese pound and inflationary pressures. The economy is projected to contract 3.6% in fiscal year 2020-21, about 10 percentage points below the pre-pandemic baseline, according to the IMF.

The nation has been impacted by reduced oil revenue and floods, Finance Minister Athian Diing Athian told reporters Sunday. The funds will be deposited in a special account “and its going to be spent on the specific things it is addressed at,” Athian said.