South Sudan has run out of foreign exchange reserves and cannot stop its currency, the South Sudanese pound, from depreciating, a senior central bank official in the oil-producing nation said on Wednesday, according to Al Jazeera.
South Sudan gets almost all of its revenue from crude oil, but current output, at about 180,000 barrels per day (bpd), has plummeted from a peak of 250,000 bpd before the outbreak of conflict in 2013, according to official figures.
Al Jazeera reported on August 20 that Daniel Kech Pouch, the bank's second deputy governor, told a news conference that it is difficult for the country at the moment to stop the rapidly increasing exchange rate because they do not have resources and therefore no reserves.
In 2015, South Sudan’s currency fell drastically in value after the central bank floated its exchange rate, which had been previously pegged to the dollar.
Floating of the exchange rate was caused by inadequate foreign exchange reserves as a result of falling oil revenues caused by widespread corruption and the country’s civil war, which started in 2013, according to business website Brookings.
The implications of this are that South Sudan could soon run out of money to import much-needed commodities including medical equipment, especially as the COVID-19 pandemic continues to spread across the African continent.
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