This archive report was first published on 24 August 2020.
As the world grapples with the economic fallout of the pandemic, South Sudan is facing a perfect storm of challenges that threaten to derail its economy. The country's foreign currency reserves have been depleted, leaving the Central Bank of South Sudan struggling to control the devaluation of the South Sudanese Pound.
According to experts, the country's reliance on a single revenue stream – crude oil production – has left it vulnerable to fluctuations in the global oil market. With oil production down by 28% since the civil war, the country's foreign currency reserves have taken a hit, making it difficult for the Central Bank to intervene in the market.
“It’s difficult for us now at this moment to stop this rapid exchange rate because we don’t have the [foreign] reserves for us to intervene in the market,” said Bank of South Sudan Deputy Daniel Kech Pouch.
As a result, the exchange rate has become increasingly volatile, with the commercial bank rate standing at 190 Sudanese pounds for a dollar, while the black market rate has doubled to 400 Sudanese pounds per dollar.
Experts warn that the country's economic collapse is imminent, with the low reserves limiting its capacity to import essential goods like meat, oil, and cereals.
Published on August 24, 2020.
