South Sudan’s central bank said it plans to inject much-needed hard currency into the market to cool down exchange rate volatility in the country.
Central Bank Governor Dier Tong Ngor told reporters in Juba on Friday that the institution is ready to defend the local currency and to meet the market demand.
However, he did not say how much money will be injected into the market.
“With the current projected improvement in foreign exchange reserves, we want to announce that the bank is ready to support the market with foreign exchange to meet foreign exchange needs for the importation of essential goods and services,” said Ngor.
The official further said the bank has already supported the fuel sector and the importation of essential food items, pointing out that the current level of exchange rates is largely created by speculations.
“The bank has now entered the market and we expect the exchange rate to respond to our intervention,” he said.
Ngor noted that the South Sudan macroeconomic outlook is starting to show signs of recovery after the signing of the peace deal. He added that the Net Foreign Assets (NFA) is also showing signs of improvement.
“The Bank of South Sudan projects the Gross Domestic Product (GDP) growth to reach 5 percent by the end of 2019,” he said.
“The bank has approved some internal policies that are aimed at making the work of the bank more transparent and accountable,” he added.
Inflation in South Sudan has been in the triple digits at various stages during the devastating conflict.
The world’s youngest country, which has one of the largest reserves of crude in sub-Saharan Africa, is struggling to increase oil production months after the signing of the peace deal in September 2018.