Central Bank to auction SSP 10 billion

Central Bank to auction SSP 10 billion
A South Sudanese proudly counting South Sudanese pounds. Photo courtesy

The Bank of South Sudan announced a SSP 10 billion auction to commercial banks.

Chance Baniko, the communication officer for the Bank of South Sudan (BoSS), confirmed that the auction would take place on Wednesday, May 31, 2023, through term deposit.

“The auction will take place after the publication of the auction by media houses. The date 29 that appears on the letter is meant to be its publishing date. Please check it on our website,” he said.

Grace Araba, the chairperson of the Term Deposit Facility Committee at the Bank of South Sudan (BoSS), said the banks should submit their bids on Monday at 9 a.m. as the process closes at 10 a.m. The auction will open at 10:15 a.m. and close at 11 a.m.

The 14-day tenor that will mature on June 11 will be allocated SSP 5 billion, the 28-day tenor on June 25 with SSP 3 billion, and the 84-day tenor on August 28 with SSP 2 billion.

“The Bank of South Sudan intends to auction the sum of SSP 10,000,000,000 to eligible banks through the Term Deposit Facility Operation that earns interest over the duration of the tenor,” read the statement published on BoSS’ website.

“The auction will be held on Wednesday, May 31, 2023, and settlement (including an upfront payment of the accrued interest) shall be completed on the same day.”

Asked whether the move would be counterproductive, Mr Baniko said the move was not contrary to the normal auction they had been carrying out by injecting dollar into the market. He said the term deposit was not the same as the normal depositing and might not mean getting out dollar from the market back into the bank.

“We are not making a reverse, there is a difference between term deposit and the normal auctioning we carried out. Visit our website for more information,” he confided.

On Friday, the Minister for Finance and Planning, Dier Tong Ngor, and the governor of the Bank of South Sudan, Johnny Ohisa Damian, briefed President Salva Kiir Mayardit that they had enough reserves to blunt the sharp-edged inflation.

“We have reached a concrete solution to bring dollars into the market to address the high inflation,” Dier said.

The governor of the Bank of South Sudan, Johnny Ohisa Damian, said the bank would finance the importation of commodities to South Sudan’s markets.

This was contrary to the argument from economists Abraham Malieit and Morris Madut that the bank lacked dollar reserves to change the exchange rate from the current floating rate to a fixed rate.

Over the weekend, the exchange rate had reduced from SSP 107, 000 for $100 to SSP 95, 000 for $100.