South Sudan’s Central Bank to be investigated over black market forex dealings
3 min readBy Ngor Arol Garang
October 22, 2011 (JUBA) – South Sudan’s government has ordered an investigation into suspected black market foreign currency trading by employees at its Central Bank, as inflation and the price of basic goods continues to increase in the fledgling country.
A picture shows freshly-minted notes of the new South Sudan pound, which pictures the late South Sudanese independence leader John Garang, in Juba on July 18, 2011.(Getty)
"Employees are able to buy dollars at the official rate of between 2.9 to 3.3 pounds to the dollar and sell them on the black market, where a dollar rate goes beyond 4 pounds," Marial Awuou Yol, a deputy minister of finance and economic planning, said on Friday.
He said his ministry has asked South Sudan’s security services to investigate all businesses involved in foreign exchange including banks, insurance companies and exchange bureaus.
“We have ordered them to be placed, or be incorporated into the central bank, because it looks like there is connivance between some staff of the central bank and these mobile bureau exchange owners operating on the street,” the minister explained.
The senior official’s statement comes after the National Bureau of Statistics on 18 October released an analytical report revealing an inflation rate at 61.5% in September, up from 57.1% in August.
Yol said the government would employ detectives to conduct “thorough” and “tactical” investigations to bring to light this “invisible group” involved in illegal foreign exchange and currency speculation.
The week more than 20 people were arrested for involvement in illegal money changing, the government has said.
Prices of basic commodities in country have tripled prompting president Kiir on Friday to issue a presidential decree forming a economic and security monitoring committee.
The committee includes five ministers: Garang Diing Akuong, minister of commerce, industry and investment; Stephen Dhieu Dau, minister of petroleum and mining; Kosti Manibe minister of finance; Deng Alor Kuol, minister of cabinet affairs; Nhial Deng Nhial, minister of foreign affairs and international cooperation.
President Kiir also established a security committee, which includes Gen John Kong, minister of defense and veteran affairs, Gen Alison Manani Magaya, minister of internal affairs, and Gen James Hoth, the Chief of General Staff for South Sudan’s army (SPLA). The term of the references include identifying, analysing and evaluating issues pertaining to security and economics. They are to report their findings to the president within three weeks.
As part of the government’s effort to address soaring food prices, the central bank last week also announced a weekly injection of $200 million into financial establishments including the foreign exchange market in the capital Juba.
However, the deputy minister observed that this would only be effective if security agencies are able to prevent illegal speculators from profiting on the black market.
“If no safety nets are out in place, it will be like pouring water into a bottomless hole, so we have to safeguard against more leakages in the currency market,” he said.
He attributed the increase in food prices to closure of border trade between South Sudan and Sudan after fighting erupted between government forces and rebels in Sudan’s border states of Southern Kordofan and Blue Nile.
He also blamed illegal checkpoints within South Sudan which demand payments on imports from the neighbouring Uganda, where most food items are imported from.
The ministry of internal affairs in collaboration with the ministry of finance this month, however, announced it was acting to close the illegal roadblocks.
(ST)
http://www.sudantribune.com/South-Sudan-s-Central-Bank-to-be,40505
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