Home | News    Monday 6 October 2014

S. Sudan awaits presidential response to devalue currency

separation
increase
decrease
separation
separation

October 5, 2014 (JUBA) – A senior South Sudanese central bank official said on Sunday that the institution awaits a response from President Salva Kiir to devalue the country’s currency so as to regulate and manage differences between official exchange rates and those on the black market.

JPEG - 48.1 kb
Kornelio Koriom, South Sudan’s Central Bank Governor addresses journalists in Juba, 11 September 2012 (ST)

“What happened is that the governor after he was summoned by the parliament, decided in consultation with the minister of finance to seek the way out, which is ameliorate the effect the differences between the official rate and the black markets had cost the economy and people of the country", he told Sudan Tribune.

The official, who preferred anonymity, attributed hard currency scarcity to plans by government to meet costs of its excessive borrowing from different institutions.

"The current conflict is causing the country very much in many aspects. When the government borrows money from lenders, it gets these loans with normally unbearable conditions and exorbitant charges. Some of these lenders demand repayment in dollars even in the cases of local loans,” revealed the senior bank official.

He cited, as an example, the South Sudanese government which largely depends on oil exports as its only source of hard currencies.

“When it is sold and bought and the hard currency is acquired, the lenders demand payment in foreign money,” he stressed.

According to the US-trained official, the central bank devalued its currency due to inadequacy of the local currency in its treasury.

“Because of the difference in the official exchange rate and the black markets compounded by the need to meet the deficiency in the budget allocated to the ministry of defence and the security, the government decided to sell every dollar to the central bank at the rate of 4.50, so that it covers this difference”, he explained.

He further alleges that the ministry of defence has in the first quarter of financial year, used more than 40% of its budget, suggesting that the overall annual budget will eventually be exhausted in less than four months of the fiscal year since the budget was passed by the national legislative assembly less than three months ago.

On 19 September, the central bank governor, Kornelio Koriom wrote to the president requesting permission to devalue the local currency against the US dollar, to meet the country’s economic difficulties.

Koriom was on 18 September summoned by MPs to explain the discrepancies in exchange rate in the country. Also summoned along with the governor was finance minister, Aggrey Tisa Sabuni.

In his response, Koriom attributed the difference to issues beyond his control and pleaded with lawmakers to help him get parliamentary approval to raise the official exchange rate from 2.96 South Sudanese Pounds per US dollar to 4.50 so as to encounter the mushrooming black market rates, currently at between SSP46-48.

The Bank governor, in his parliamentary address, told legislators that the negative effects of maintaining official rate besides the black market “were immense” and that the bank was “very concerned about the developing economic and monetary situation”.

“There are challenges before us in this country. I tell you sincerely that there are enormous challenges facing us as leaders to make decisions and take actions. There are now challenges to make decision to unify these efforts, including plans to unify rates. There should be increased salaries for employees and the austerity measures should be implemented first. This is not the work of central Bank,” Koriom told MPs.

“Money given to foreign exchange bureaus by Bank of South Sudan often finds its way to the black market”, he said upon being pressed.

As a measure, the governor said, more than 60 security agents have been deployed to commercial banks and other financial establishment obtaining money from the central bank allegedly to control movement of hard currency.

“In our own efforts and desire to control this situation with other relevant institutions, we deployed over 60 security personnel to these institutions. We gave them strict instructions to monitor and control the flow of the hard currency into the markets. We clearly explained to them the category of people who should get the hard currency,” he remarked.

He however said the bank only addresses matters related to those seeking medical treatment abroad or cases where someone demand money for school fees payment.

(ST)

Comments on the Sudan Tribune website must abide by the following rules. Contravention of these rules will lead to the user losing their Sudan Tribune account with immediate effect.

- No inciting violence
- No inappropriate or offensive language
- No racism, tribalism or sectarianism
- No inappropriate or derogatory remarks
- No deviation from the topic of the article
- No advertising, spamming or links
- No incomprehensible comments

Due to the unprecedented amount of racist and offensive language on the site, Sudan Tribune tries to vet all comments on the site.

There is now also a limit of 400 words per comment. If you want to express yourself in more detail than this allows, please e-mail your comment as an article to comment@sudantribune.com

Kind regards,

The Sudan Tribune editorial team.
  • 6 October 2014 17:56, by Ahmed Chol

    That is why it is important to be educated enough so that one can handle such problems. You need to analyze the whole web of matrix that is intimately related to this problem. Devaluing alone will not help. Local production is also another factor, how long are you going to survive on foreign food imported as a country?

    repondre message

    • 6 October 2014 17:58, by Ahmed Chol

      Your industries and factories have to be roaring pumping out sugar, salt, flour, the basic necessities, otherwise the unavoidable awaits us!

      repondre message

  • 6 October 2014 18:05, by Ayuen deng

    I think president Kiir will not allowed this but regulate current strength. see Uganda shilling,is it valuable now?
    So what will we gain from devaluing our Pounds?

    repondre message

  • 7 October 2014 09:34, by Redeemer

    Mr. Koriom
    You are the very people behind the black market, there is no word you can use to make us believe that the black market controls the central Bank

    repondre message

Comment on this article



The following ads are provided by Google. SudanTribune has no authority on it.


s
Sudan Tribune

Promote your Page too

Latest Comments & Analysis


Dissolution and formation of the Cabinet - 2013 2018-04-20 08:00:00 Amb Telar Deng The events that led to the 2013 dissolution of cabinet can be traced back to the deep mistrust that fermented back in 1991 when leaders failed to close ranks. After the 1991 (...)

The Darfur issue remains in oblivion 2018-04-20 07:36:49 By Mahmoud A. Suleiman The victims and survivors of the atrocious crimes in the Darfur region where very few in the world cares for their plight continue feeling trapped, no way out but at the (...)

IGAD and the question of impartiality 2018-04-20 07:18:21 By Duop Chak Wuol One of the main reasons the Intergovernmental Authority on Development (IGAD) was formed was to maintain peace in the East African region. In its mission statement, the bloc (...)


MORE






Latest Press Releases


Abyei celebrates Mine Awareness Day 2018-04-05 08:52:03 4 April 2018 | Abyei - The United Nations Interim Security Force for Abyei (UNISFA) and the United Nations Mine Action Service (UNMAS) commemorated the International Day for Mine Awareness and (...)

Appeal for forgiveness and pardon of John Agou Wuoi 2018-03-07 08:28:08 H.E. Salva Kiir Mayardit, President and Commander-in-Chief, of the Sudan People's Liberation Army (SPLA), Republic of South Sudan (RSS), 5th February, 2018. Through: Hon. Michael Makuei Lueth (...)

Petition for release of Agou John Wuoi from prison 2018-02-15 20:45:31 Open letter to South Sudan President Salva Kiir Your Excellency, Kindly please permit me to take this rare opportunity to appreciate you for every effort you have made toward making South Sudan (...)


MORE

Copyright © 2003-2018 SudanTribune - All rights reserved.