[Juba, South Sudan TCT] --The value of the South Sudanese pound (SSP) has continued to fall against the U.S. dollar during the first week of February in the parallel market. According to currency dealers, one U.S dollar sales for 24.5 pound as of Saturday and Sunday, up from $ 1 to 21 last month in the same parallel market. The rise in exchange rate has forced traders in the capital to hike commodity prices in the market leaving citizens to complain of the rapid rising cost of living.
“Today, a bottle of mineral drinking water has surged to 80 pounds from 60 at the beginning of the year, “Majur Mabor, a money trader in Juba town told TCT. Mabor said as of the end of the first week of February, the exchange rate was drastically increasing and it may hit what he described as ‘worse ceiling’ within the coming days.
“There has been no improvement in the rate exchange instead it is increasing on daily basis,” he said.
Ismail Mohammad, a trader in Konyo-Konyo, which is a second busiest market in the capital, said the exchange rate has risen during the past few days after it had stabilized within the limit of South Sudanese Pound 20 per $1 early in the year.
“As the dollar continues to weaken the pound, prices in the market will keep increasing day by day and this affects people’s businesses and the living cost,” Mohammad stressed.
Based on the spot carried out by TCT, a 50 kg of maize flour costs 8,000 pounds tripling the wages paid to senior government directors.
Dr. Lual A. Deng, Economist, and Managing Director at Ebony Center for Strategic Studies, said the increasing rise in the dollar against the local currency can be attributed to the scarcity of supply of the dollars into the market by the government. The Economic expert noted that there is high demand for it from importers and traders and the government has no power to control it since the Central Bank has limited reserves. The expert predicted that the prices of food commodities will remain high in the market as the rate of the dollar to pounds kept increasing on daily basis.
“If parties in conflict do not stop war in the country” the economy will keep deteriorating, the expert warned.
“It will only improve when there is a positive result from either the revitalization process or national dialogue,” Deng said.
“Another way to see change in reduction of the dollar against the pound is if government can reduce its military and security sector expenditures and start focusing on adjusting the country’s economy,” Deng stated.
98 per cent of the South Sudan budget depends on oil, however the decline of oil prices and the war have triggered an economic crisis in the east African young nation. South Sudan floated the fixed exchange rate in December 2015.BLOG COMMENTS POWERED BY DISQUS