Central Bank pushes dollar auction to Thursday

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

The much-anticipated dollar auction to commercial banks by the Bank of South Sudan (BSS) was not conducted on Monday as earlier promised, thus raising fears that the South Sudanese Pounds (SSP) could continue plummeting against the dollar.

The auction, which was targeting commercial banks and participating forex bureaus, was supposed to ultimately protect the depreciating SSP by reducing the demand for the US dollar.

Auction announced

On Friday last week, the Central Bank announced the release of $8 million to commercial banks and forex bureaus, which they said would start on Monday, June 13, this week.

However, on Monday, the letter issued by Marial Mabeny Bawuor, the Foreign Exchange Auction Supervisory Committee, Bank of South Sudan, only indicates the auctioning of $3 million on June 16, 2022, Thursday to the forex bureaus.

“The Bank of South Sudan intends to sell US dollars at a price of $3,000,000.00 (USA). Three million only) to eligible forex bureaus through an auction to be held on Thursday, June 16, 2022.

“The auction process will be governed by the Bank of South Sudan’s Foreign Exchange Auction Rules and Procedures,” the statement partly reads.

It further stated that application forms, as well as the Auction Rules and Procedures, can be collected from the offices of the Chairman of the Auction Supervisory Committee and the Bank of South Sudan during working hours.

When contacted if they had released the dollars that they had promised to auction to commercial banks on the first day of the week, one of the unnamed inside sources revealed that no auction had taken place as of Monday.

“There is no auction as per today (Monday) but there is a letter that was issued by the Foreign Exchange Auction Supervisory Committee Bank of South Sudan and I think it will start on Thursday,” said the source, who preferred anonymity.

According to Moses Makur Deng, the Governor of the Central Bank, the commercial banks will receive the dollar on Monday, with the forex bureaus three days later – on Thursday.

Last week, Governor Makur stated that weekly injections of $5 million into commercial banks and $3 million into forex bureaus would provide a reprieve to the depreciating local currency. 

 “We warn speculators that your basis for expecting a rise in the value of the dollar might not be as concrete as you think because we have now reserved the dollar for this situation until it goes back to where we want it, SSP 400 per dollar,” Governor Makur warned.

He added that “We want to inform the public that the central bank of South Sudan has not increased the money supply.” We are still in the range of 10 per cent, which was injected early this year.”

‘‘All these discrepancies happening here and there are just temporary. They are not fundamental. Although we will be paying some salary arrears, relevant dollars equivalent to that amount will be auctioned.’’

The plan to auction dollars to commercial banks was announced last month by the Bank of South Sudan, geared to lower exchange rates, but it did not seem to happen.