The National Alliance: Policy of Devaluating Local Currency Must Be Revoked
Dec 19, 2015 (Nyamilepedia) — The National Alliance, a coalition of several South Sudanese Political Parties inside South Sudan, has called upon South Sudan Minister of Finance and Economic Planning Deng Athobei to revoke the policy of devaluation of local currency adopted last week. In a six (6) point-page official statement, signed by Party Representatives, extended to Nyamilepedia regrets the decision taken by the Central Bank of South Sudan (BOSS) devaluing South Sudanese Pound and calls upon South Sudan Ministry of Finance to revoke the decision for it doesn’t favour the market.
“We call upon the Minister to immediately revoke his decision regarding the new policy. Attention should be directed to fighting corruption, protecting the lower income levels, promotion of production and encouraging investment. All these need a conducive atmosphere of peace. It is only peace that can create a genuine economic reform that will control inflation through sound fiscal and monetary policies,” reads the statement.
South Sudan Minister of Finance and Economic Planning on Monday, December 14, 2015 released a surprising economic plan that allows to depreciate South Sudan Pound against the US dollar with effect from the same night. This economic plan stipulates that Foreign Exchange rate wouldn’t be as fixed as it has been but would be based on the market behavior, giving the dollar holders to determine the fate of the local currency based on the their own exchange rate.
The current exchange rate as per new economic plan has put 18.55 SSP per US Dollar, already triggered high-rocketing prices of commodities in the local market.
“The reaction of the market was as expected; the prices shot up. The wholesale dealers who sell food items, all foreigners, closed their shops.”
“On Wednesday, for instance, the prices of some of the consumable goods were as follows: the price of a bag of flour rose from 450 to 975 SSP, bag of sugar from 650 to 1,250. A litre of fuel now sells at 22 SSP, up from just 6 SSP. The transport fares have also gone up drastically. The worst has yet to come,” reads part of the statement.
“On Wednesday, the importers bringing in goods to our country from Uganda returned at Nimule when asked to pay the customs at 18.5 SSP per dollar as opposed to 3 SSP previously. This will exacerbate scarcity of goods and thus higher prices. As long as the prices are pegged to the dollar, they will continue to shoot up and the masses of our people will get impoverished more and more.”
Last week, the Central Bank of South Sudan lifted obligations that require banks to determine their own exchange rates, a policy reaffirmed by South Sudan Minister of Finance and Economic Planning. The ongoing war further complicated the economic conditions of the country. South Sudan main exports is on oil but most pipelines from war prone areas particularly in Bentiu have been shut down with exception of that of Upper Nile State.
This report is compiled by Gatluak Pal Chuol, Associate Editor of Nyamilepedia. He can be reached via firstname.lastname@example.org.