Central Bank increases weekly auction of dollar

Central Bank increases weekly auction of dollar
The Bank of South Sudan will from Thursday start auctioning the Dollar to caution Pound.

The Bank of South Sudan increased the weekly amount of hard currency it injects into the market by $7 millions.

The Bank said they will raise weekly sale of the dollar from  $13 million to $20 million.

It is about two years since Bank of South Sudan – BOSS began the weekly auction of dollars to commercial banks and forex bureaus in a bid to stabilise the market.

Addressing the media on Thursday, formerBOSS Governor Moses Makur Deng, said the increment is to find the fruits of the elusive solution to the losing pound.

“Although we have been making auctions of $30 million a week, the amount found outside is more. We have not yet made enough for pounds to appreciate,” Makur said.

Makur has since been fired from his position by the appointing athourity- the President.

He insisted that auctions remain one of the most transparent ways of taking foreign currency into the market to stabilise local currency depreciation.

“It is found that in the whole world, the auction system is the most transparent way of allocating foreign currency to the market,” Makur argued.

However, Makur also refuted some opinions from the public that the central bank was behind the increase in the exchange rate and the continuous depreciation of SSP against the USD.

“It sounds like the bank is the one increasing the rate. It sounds like that but is not the case because this auction process is a very complicated process and even the process of calculating bank rates is not decided by the Bank of South Sudan. We collect the average rate of all commercial banks [and] we make the average, that will be our rate,” he said.

“Our rates depend on the rates of commercial banks because we do not want to have a different rate between the black market and the central bank. We need to close the gap as much as possible,” he added.

Makur also dismissed the opinion that the continuous injection of pounds into the market through salaries by the ministry of finance was a factor.

He said the government had paid six months’ salary arrears in just one month, but this could not translate into the depreciation of the pound.

“Other factors include some salary advances that were given and other critical government functions, for example, money to graduate unified forces that are essential for the smooth implementation of a peace agreement based on that the dollar has been going up in South Sudan,” Makur added. 

The Central Bank governor blamed some foreign business institutions operating in the country for taking the dollars being injected into their countries.

“The market is still thirsty for more exchange rates and the market seems to be empty.”  “That suggests that what we have been pumping into [the market] has been taken out to foreign countries,” he said. 

“We are running an economy that depends very much on foreigners, and if they are businessmen or companies, this has its effect; whatever we eject, they take it to their countries,” he said.

Makur said the commitment shown by President Salva Kiir by directing the ministry of petroleum to give one cargo of a special blend cargo of crude oil for salary payments would yield positive results.

“But to secure a constant supply of dollars, we made a very strong move and we met with the president,  minister of finance, minister of petroleum and we agreed,” he said.