Changes of Central Bank’s Governors create market uncertainty – Economist

By Gilo Jr.Okwata

An economist has stated that the frequent changes of Central Bank bosses might create uncertainty in the foreign exchange, market and fears to the investors.

Speaking to Juba Monitor in reaction to the recent sacking of Central Bank Governor, the Economist who is also the Vice Chancellor of Upper Nile University, Professor Marial Awou Yol suggested that high turnovers (incomings and outgoings) of Central Bank governors would create certain amount of uncertainty to the investors.

“Normally, high turnover of Central Bank governors have significant impacts on the economy because it creates uncertainty in the foreign exchange, capital market although we don’t have capital market but definitely it creates certain amount of uncertainty to the investors because they are not certain about the policies of incoming governors, and can impact the economy negatively,” Awou said.

He suggested that such heads of financial institutions should be given enough time for people to see the consequence and results of their policies citing that the length of time the Central Bank governor spends is a measure of Central Bank’s independence which is important for economic stability.

“Otherwise, if I have to be asked, somebody like Central Bank governor or Minister of Finance should be given a certain time limit so that people could see what is the result of his policy because everybody when they are appointed they have policies that they want to implement and when you appoint someone and you remove him in six months, ten months the policies are not yet unfolded enough to show results. In the study of banking, the length of time the Central Bank governor spends is the measure of independence and stability,” Awou added.

On Monday, President Salva Kiir Mayardit sacked the country’s Central Bank Governor, Jamal Abdallah Wani, in a republican decree, replacing him with his predecessor Dier Tong Ngor who was replaced by Jamal himself in January this year.

The decree read out on the state-run South Sudan Broadcasting Corporation (SSBC) did not cite reasons for the sacking, but the country has been in economic crisis due to combination of a number of factors such as corruption, civil war, coronavirus pandemic and global fall of oil prices among others.

The sacking came two months after the Central chief announced during a press conference in August that the country has run out of foreign reserves. A month later, the Minister of Trade told lawmakers that the government could not control foreign currency in the Market because it owed local banks millions of dollars.

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