Sep 12, 2020(Nyamilepedia) — South Sudan’s Minister of Trade and Industry has informed the lawmakers that the Central Bank has lost control over the commercial banks and the black market as the country enters into hyper inflation.
Speaking to members of the defunct legislative assembly, the Minister of Trade and Industry, Hon. Kuol Athian, regrets that the Central Bank is in debt crises of almost $100 millions owing to the commercial banks.
“According to what they have told me, the commercial banks say they need money from the central bank – Equity needs about $47 million, KCB needs $16 million, Ecobank needs $15 million, Cooperative Bank needs $10 million dollars and Ivory Bank needs $4 million,” Hon. Athian said.
Hon. Athian said with such debts, the government has no power to regulate the commercials because they threaten to take the government to court.
“So, with these debts, the government cannot regulate them because they sometime threaten the government to take us to court and that is why we cannot regulate the circulation of the dollar in the black market,” Hon. Athian continued.
According to the Minister of Trade and Industry, the Commercial Banks have lost trust in the government not only for failing to repay its debts but also for failing to implement regulatory measures on circulation of foreign currencies.
South Sudan government officials confirmed last month that the country has ran out of foreign reserves leaving the black market as the only source of hard currency.
With the commercial banks and the black market taking over the Central Bank, South Sudan economy is running into hyper inflation as the South Sudanese pound continues to depreciate against the dollar.
In an attempt to reduce the inflation, the government has ordered the use of local currency and a ban on foreign currencies.
The government is also introducing larger bills into the market as the South Sudan pound has significantly lost its value, something economists believe will only depreciate the SSP even further.
At the time of this writing, $1 USD was being traded between 500 SSP to 510 SSP as opposed to around 490 SSP it was traded at yesterday, on Friday.