The deputy governor of South Sudan’s central bank warned that the nation’s currency, the South Sudanese pound, was devaluing very quickly amid a host of problems facing its economy.
According to Daniel Kech Pouch, there was little the authorities could do to arrest the dramatic slide in value of the currency.
“It is difficult for us now at this moment to stop this rapid exchange rate because we don’t have the reserve for us to intervene in the market,” Pouch said.
Pouch added that the nation’s foreign exchange reserves had been depleted as oil revenues, which the country is heavily reliant on, have dropped sharply exacerbating the situation.
He told the Voice of America that the country’s underground economy was awash with U.S. dollars which, however, did not end up in the central bank.
“There are other agencies that bring money to South Sudan that does not come through the Central Bank. And there are some commercial banks that bring money, which does not also come through the Central Bank. You know, the Central bank has no system that unifies the operation of the bank (with) the flow of money, whether inside or going outside.”
As of Thursday, a U.S. dollar on the black market would exchange for 400 South Sudanese pounds while the dollar would exchange for 165 South Sudanese pounds at the central bank.
South Sudan’s economy has been ravaged by years of instability, high inflation, drops in oil production and global prices and, most recently, the COVID-19 pandemic.
Despite this precarious situation, South Sudan plans to increase its budget by 29 percent to fund the expanded government under the peace deal, a report by Bloomberg said.