Abdelbagi defends BOSS against a losing Pound

Abdelbagi defends BOSS against a losing Pound
Vice President for Service Cluster, Hussein Abdelbagi Akol (middle). [Photo: VP Press]

The Vice President for Service Cluster, Hussein Abdelbagi, has defended the governor of the Central Bank, Moses Makur Deng, against criticism that he has failed to shield the South Sudanese Pounds against the dollar. 

Abdelbagi said foreign traders have taken control of the market and any money they earn they take back to their countries instead of leaving it to circulate within the country.

 “You have left the country in the hands of foreigners, and then you cry that dollar is expensive, how can the exchange rate not increase, yet they make money so that they can take it to their countries and increase the prices of commodities so that you fall into trouble.”

He urged the governor to support the youth through micro-finance to create an impact by controlling the outflow of currency when they dominate the market.

“Makur, if there is a youth who is here and wants to change what is happening in the market, let him come up with a plan and he will be assisted through micro-financing so that he can control the market,” he added.

Makur said the government had signed a treaty for currency exchange in the East African partner states.

“We have signed currency exchange as members of East Africa so that currency from one country can be exchanged in the other partner state,” Makur said.

“This will help people because it will lower high exchange rates against the dollar. The use of mobile money will also help us because you can easily send pounds from here and it will be received in Uganda as a shilling. If it happens, then the dollar will be needed by someone who has his reason for looking for it.”

There has been an outcry among the citizens as the exchange rates of pounds against the dollar keep on hiking day by day.

Deficit financing

Last week, the Vice Chancellor of the University of Juba, Professor John Akec said inflation is being worsened by what he termed as “deficit financing” and “auctioning of dollars reserved” which he said could not stabilise the economy.

He argued in an interview with The City Review that currency reserves cannot be supplied to the market but only used to replace broken currency.

“We are adding water to the fire to quench it. On the other hand, we are adding large amounts of gasoline to the same to inflame it.” 

“There are two things happening here. Auctioning supplies the market with the dollar which is a positive action. And you know dollars don’t come only from Central Bank, also those working with NGOs get their salaries in dollars and take it to the market. But the fact that Central Bank had been auctioning, it increases the supply of dollar because that is, they use the dollar actually for import,” Prof Akec.

He warned against the dangers of printing more currency by the Bank of South Sudan, saying it also devalues the currency.

“Deficit financing is printing the money and supplying it that is not the good way. It is done for a very short time but very destructive negative because you are supplying the market with notes which are not backed by any currency,” he warned.

During his swearing-in ceremony last year, President Salva Kiir tasked Makur to lower currency exchange to SSP 400 per dollar.

Dr Maliet said Makur was the right man for the job, as he described him as the “son of the bank” for he had amassed experiences over the years in the bank.

“I think in terms of employment or appointment as the governor, it is correct because he has been in this bank since the beginning,” Dr Maliet said.

He urged the ministry of finance to always seek advice from economists to help them in policy-making to salvage the dwindling economy.