BOSS auctions USD 3 Million in bid to stabilize economy
The Central Bank of South Sudan (BOSS) yesterday auctioned 3 million United States Dollars to 20 commercial banks in a bid to stabilize the country’s fragile economy and check inflation.
Speaking to journalists during a press conference in Juba yesterday, the Governor of the Bank of South Sudan, Dier Tong, said the auction will become a scheduled event with a planned USD 5 million auctioned weekly starting next week.
“This is in addition to the weekly foreign exchange auction for forex bureaus that the Bank of South Sudan has been conducting since the end of last year,” Governor Tong said. “And we want to make it clear here that this new action that the Bank of South Sudan is taking is for the long haul. I think there are some in the market there who think maybe we are going to do this auction for one week or two weeks.”
He continued, "So all in all, we will be supplying an amount of 5 million dollars every week. USD 2 million to forex bureaus and USD 3 million to the commercial banks.”
According to the Central Bank, a total of 22 commercial banks had applied but only 20 banks went through with the auction.
In a telephone interview with Radio Tamazuj yesterday, a South Sudanese economist, Professor Akim Ajith, said the money will provide only a short-term solution to the country’s economic woes.
“That thing can help maybe just now in the short term, but in the medium term and the long term, I don’t think they will bring the lasting solution because 3 million dollars to be injected into the economy is not enough. What I know is going to happen is that this money will end up in the hands of the black market here or people who are selling the dollars in the black market,” Prof. Ajith said.
“They will take this money and it will help them. In one week or two weeks they will be the ones to sell them again in the black market,” Prof. Ajith added. “So that is not the solution and that is why I am saying it will help in the short term but in the long run it will not help.”
On Monday the Bank of South Sudan will auction another USD 3 million to commercial banks and another USD 2 million to forex bureaus on Thursday.
Since December last year, the Central Bank of South Sudan has been auctioning USD 2 million to forex bureaus to help stabilize the market.