Central Bank warned of plan to inject more $US into the economy
By: Manyuon Mayen Manyuon
The Central Bank move to inject dollars to the market may rescue the country’s economic status only if the supply is consistent, said Certified Public Accountant.
Garang Atem Awuol, a senior finance expert who is specialized in Financial Management said the plan to inject more dollars would only rescue the country’s economy if it is steady.
Last week, the Central Bank of South Sudan announced that it will put more dollars to the market as an attempt to curb currency devaluation and market fluctuation.
Awuol said the decision prioritized by the Central Bank was an economical approach that economists have been wishing to tackle the current financial situation of the country.
“If we have scarcity always in the economy then the local currency may even devalue further as it pursues the dollar. So the Central Bank was trying to get an intervention into the market to quell the likely rise in prices in the market,” he said.
Awuol added that the decision would positively impact the economy of the country to its recovery if it is reliable.
“If the Central Bank is not consistent then it may not assist in curbing fluctuation. So if supply is more than the demand definitely it can reduce the rate of inflation, but if the demand is still more than the supply later on then it may not work,” the expert explained.
Mr. Awuol advised the Central Bank to fix the dollar exchange rate to South Sudanese pounds when supplying the dollar.
“There is a need for Central Bank to set a fix exchange rate and by the continuous monitoring of the currency in the market we can recover the value of our currency but if it is not ensured then it may be a waste,” he said.
Awuol encouraged the Central Bank to consider giving more dollars to commercial Banks as opposed to black market dealers.
“These banks have got the expertise on how to deal with inflation. So if the Central Bank deals with the commercial banks by supplying them with more dollars then the plan will restore our economy and we enjoy,” Awuol stated.
Though the country has been trying to solve fluctuation in the past years, he revealed that the plan had failed to materialize since the market was not being monitored.
Abdalla Ahmed, an importer in Konkonyo market who imports goods from neighboring Uganda admitted that they are faced with difficulties related to exchange rates in bringing goods from Uganda.
He said, putting more dollars in circulation was likely going to help them to solve such issues.
“We could always find ourselves in losses due to devaluation and there is no way. So if this directive from the Central Bank is going to be fair, transparent and effective then it can rescue us from this suffering,” Ahmed said.
Another trader at Konykonyo market who preferred to be known as Mama Sarah for the fear of reprisal said that she doubted if the money will reach the intended beneficiaries.
“It is not the first time that the Central Bank is initiating a move towards rescuing devaluation but our worry is, won’t that intended money go to individuals’ pockets,” she questioned.
“And these could be friends of Central Bank who they think they will benefit from the plan. I really doubt whether it will solve the issue,” she added.
Sarah stated that the plan would only help if the South Sudanese eliminates the idea of benefiting from any initiated project.