South Sudan cracks down on parallel FX market to fight inflation
South Sudan has cracked down on forex dealers in the capital, Juba, in a move the country’s top central banker said was part of an effort to stabilize its rapidly depreciating currency.
“You have seen the law enforcement agencies telling people who are carrying large quantities for no reason, not to do so,” Bank of South Sudan Governor James Alic Garang told reporters in Juba on Saturday.
“Anybody selling dollars either on the streets or in their houses or in their shops or any corner anywhere will be asked by the law enforcement, if you are selling, show me your license,” he said, adding that anyone holding a license to deal isn’t at risk.
South Sudan’s currency, the pound, officially slumped during the first quarter to about 1,600 to the dollar from 1,000, and on the black market it’s selling at closer to 2,300 to the dollar.
Ruptured Oil Pipeline Causes South Sudan’s Revenues to Nosedive
The prices of basic goods in the landlocked central African country have tripled, yet the government can’t meet its obligations to pay civil servants or fully fund operations because of a slump in revenue.
According to Garang, a trip he made to an undisclosed foreign location in the past week was successful in directing additional resources for the country, and will be used for salaries and to stabilize the market. He gave no further details.
Sudan Declares Force Majeure After Oil Pipe in War Zone Ruptured
In mid-February, Garang said oil shipments, made using a terminal in neighboring Sudan, had been hampered by the Red Sea shipping crisis on top of attacks on Sudan’s main oil refinery – in turn pressuring the currency.
A ruptured pipeline in war-torn Sudan crucial for the country’s ability to export crude saw state revenues nosedive, South Sudan’s finance minister said this week.
“Things are a bit tough externally beyond the borders of South Sudan,” Garang said on Saturday.
