South Sudan, the landlocked East-African nation putrefied by years of perilous conflicts and corruption with oil accounting for almost all of its exports and over 40 per cent of its entire GDP (Gross Domestic Product), had run out of foreign exchange reserves, South Sudan’s Central Bank Deputy Governor said late on Wednesday.
In point of fact, speaking in a news conference the South Sundanese Central Bank Deputy Governor Daniel Kech Pouch said that a sweeping drop at the country’s oil revenues amid a multi-year low gasoline futures prices had taken a heavier than anticipated toll at the nation’s foreign exchange reserves, which eventually ran out earlier this month and the east-African country could no longer be able to prevent the devaluation of its currency.
South Sudan depletes FX reserves as oil output hit historically lows
Notably, South Sudan generated all of its FX reserves from oil revenues as beforemtioned, however at its present output, which had pummelled to 180,000 barrels per day from a peak of 250,000 barrels per day before the onset of a conflict back in the 2013s that had dwindled the country’s per capita income below $200 per annum from a prior $1,100, it became utterly difficult for the country to evade an inevitable depreciation of its pound.
More importantly, as of Wednesday’s market closure, South Sudan’s Central Bank exchange rate stood at 165 per dollar and Commercial Bank exchange rates had been around 190 against the US Dollar, while the unofficial market rates were hovering at 400 per US dollar.
Meanwhile, adding that the civil war-struck country, which had managed to downsize its inflation at 35% to date compared to an all-time high of 800% reached on 2016, might not be able to prevent a rapid devaluation of its pound amid a dour projection of oil demands at least until end-2020, Pouch said to the reporters, “It is difficult for us at the moment to stop this rapidly increasing exchange rate, because we do not have resources, we do not have reserves. ”