BSS formulates monetary policy to combat soaring inflation

Hon. Dier Tong Ngor, newly appointed Governor of the BSS |Photo: Via Facebook

November 6, 2020 (Thessherald)–The Bank of South Sudan’s Monetary Policy Committee (MPC) held an urgent Extraordinary Meeting chaired by the Governor, Hon. Dier Tong Ngor on Thursday in the capital, Juba.

The meeting centered on current inflation rates and how effective monetary policy can be formulated and adopted in an effort to boost the country’s moribund economy.

“The meeting was held on the backdrop of the rapid depreciation of the SSP and high inflation. The meeting suggested ways to calm the market, using available monetary policy tools.”

The committee acknowledged that the nation is going through perilous times in the wake of the Covid-19 pandemic, and low oil prices among other issues.

“The MPC noted that the economy is severely battered by shocks brought about by COVID-19 pandemic, low oil prices, which led to considerable fiscal imbalances and constrained financial system performance, particularly the banking sector.”

“In light of the above, the MPC resolved to tighten monetary policy stance to mop the excess liquidity from direct borrowing from the Central Bank.”

In this regard, the MPC resolved the following:

• Raised the Central Bank Rate (CBR) to 15%

• Increase the Reserve Requirement Ratio (RRR) to 20%

• Increase the cash reserve ratio to 20%

• The Central Bank will urgently introduce its own bills as a toll of liquidity management mechanism.

• Bank will step up its supervisory role by continuously monitoring the cash in-vault of commercial banks.

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