Africa-Press – South-Sudan. The Bank of South Sudan cancelled its weekly auctioning of US dollars to commercial banks and forex bureaux last Friday due to “irregularities”.
The Foreign Exchange (FX) Auction Supervisory Committee noted in a statement posted by the bank on its official page that it met with the governor and first deputy governor for policy and banking over the matter on May 11, 2023.
The meeting endorsed the cancellation and called for punitive measures against violations of the Bank of South Sudan’s (BOSS) FX rules and procedures.
According to FX Auction Rules and Procedures (2015), “the BoSS may at any time, in its sole and absolute discretion, with or without notice, postpone or cancel an auction, whether before or after bids are submitted, whenever there are irregularities observed.”
Also, the “Bank of South Sudan noted with concern the FX market volatility and further depreciation of the SSP against the USD since the beginning of the year, exacerbated by the ongoing war in Sudan on speculative motives and the Fed’s recent hikes in interest rates by a quarter percentage point, which exerted upward pressures on prices of imported commodities”.
BoSS observed that growth in broad money was stable in line with the 2023 target, and the annual inflation rate decreased by 6.2 per cent driven by lower prices of food and non-alcoholic beverages.
“The BoSS, while maintaining a presence in the FX market through occasional intervention, will enhance the use of the Term Deposit Facility (TDF), an interest-bearing indirect instrument, as an alternative liquidity management tool,
As a result, the Bank has expanded the range of maturities of the TDF auctioning into 28-day and 84-day maturities at annualised interest rates between 10 and 15 percent.
The bank promised to continue to tighten the conduct of monetary policy to keep the growth of broad money within the 2023 target and plan to build reserves to stabilise the market.
Source: The City Review South Sudan
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