(Bloomberg) -- South Sudan sought to weaken its currency and will inject dollars into the economy to bring the value of the pound on the parallel market closer to the official rate, central bank Governor Dier Tong Ngor said.
The Bank of South Sudan exchange rate was at 253 per dollar on Tuesday compared with 167 at the start of last month, while the black market rate in East Africa’s biggest oil producer strengthened to around 450 a dollar from 600 over the same period, according to the central bank.
“This existence of multiple rates is not a good sign,” Ngor told reporters in the capital, Juba. “We are introducing this reform with the ultimate goal to unify these rates. We want these rates to meet somewhere in the middle and this is where we will determine whether the pound is strong or weak.”
South Sudan’s oil industry is steadily recovering as a power-sharing government that ended five years of civil war remains in place, with production increasing to more than 170,000 barrels a day. That’s still significantly down from levels before civil war broke out in 2013.
The country secured a $174 million loan from the International Monetary Fund in April to help finance its budget and stabilize the currency.
The central bank will boost the amount of dollars it injects into the market to $8 million from $5 million from next week, Ngor said, adding that monetary policy would remain tight to mop up excess liquidity.
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