The Bank of South Sudan (BSS) re-introduced Foreign Exchange Auctions on the backdrop of the rapid depreciation of the South Sudanese Pound (SSP) and high inflation. This monetary policy tool –among other policy instrument implementations- has proven success in the past while addressing the economic shocks brought about by low international oil prices and other externalities beyond our control, which led to considerable fiscal imbalances and constrained financial system performance.
In light of the above, the article published by the Juba Monitor on the 20th of January, 2021, is extremely misleading and lacks the undertaking of the objectives of why the Bank of South Sudan engages in Foreign Exchange Auctions.
The objective of this tightened monetary policy stance is to withdraw the excess liquidity from the market, and in return harmonise the difference in exchange rates, while stabilising market prices. Therefore, the impression carried by some Forex Bureaus that the FX Auctions are intended for maximising the profits of Forex Bureaus are absolutely false.
We would like to make it clear that the current FX Auctions are only meant for forex bureaus. Commercial Banks are not participating; however, BSS still provides commercial banks with USD at the official rate to support the importation of essential commodities, including food items, fuel and medicines.
We strongly encourage media houses to contact the Bank of South Sudan in the future for any clarification on the Bank’s dealings before publishing on such sensitive matters that usually have adverse effects on the market and to avoid misleading the public.