Hopes high as IMF Chief set to visit Juba

Hopes high as IMF Chief set to visit Juba
President Salva Kiir (centre) in a meeting with the Minister of Finance Athian Diing Athian (second left), Central Bank Governor Dier Tong Ngor (left) and Presidential Affairs Minister Dr Barnaba Marial (photo credit: courtesy)

The Director of the African Department at the International Monetary Fund (IMF) is expected to visit Juba next month, the Minister of Finance and Economic Planning Athian Diing Athian said on Wednesday.

Athian said the IMF chief’s visit was basically to discuss the plans for enhancing economic and developmental reforms for South Sudan.

“The meeting went well and we are expecting Director of the African Department at the International Monetary Fund (IMF) to visit Juba next month to hold talks on enhancing economic and developmental prospects for South Sudan,” he said.

Athian closed the statement on Wednesday after the closed-door meeting with President Salva Kiir alongside the Governor of Bank of South Sudan Dier Tong Ngor.

Both Athian and Tong briefed President Kiir on the trip to the annual meeting of the Boards of Governors of the World Bank and IMF held in Washington D.C this month.

The annual meeting discussed world economic outlook, poverty eradication, economic development and aid effectiveness.

The annual meeting brought together central bank governors and the ministers of finance to discuss world economic outlook, poverty eradication, economic development, and aid effectiveness.

Initial funding

In August, the Central Bank of South Sudan was reported to have received $ 334 million from the International Monetary Fund to boost the economy by aiding its recovery programs.

 “South Sudan has been allocated $334 million by the International Monetary Fund as part of the general allocation of Special Drawing Rights (SDRs) approved by the IMF Board of Directors on 2nd August 2021. The allocation became effective yesterday Monday 23rd August 2021,” read the circular from the bank.

The money was disbursed under the IMF’s Special Drawing Rights which are supplementary reserve assets that are defined and maintained by the funds.

IMF’s Special Drawing Rights are defined as units of account for the IMF and not currency. 

The Central Bank applauded the funding that it was a timely incident crucial for tracking fundamental economic reforms.

“The resources have come when South Sudan is implementing essential economic reforms, including monetary and far-reaching foreign exchange market reforms, which involves refraining from monetary financing of the deficit,” the statement said.

“Utilisation of the new resources will address the budget support and the economic impacts of the COVID-19 pandemic, the balance of payment, and reserves building.”

The consequences of COVID-19 led to the decline in oil prices thereby reducing oil revenue.

“Our current economic stabilisation efforts have been supported by the significant recovery of oil prices and the two IMF disbursements under the Rapid Credit Facility in November 2020 and March 2021 for combined financing of $225 million,” the statement continued.

“These efforts have made a positive impact by helping the country address the pandemic’s adverse effects, the exchange rate stabilization, declining inflation, and the government’s ability to reduce salary arrears substantially”.

In 2020, IMF Managing Director Kristalina Georgieva advised that the government of South Sudan to use funding appropriately in a bid to recover its economic development.

The statement came after IMF donated $52 million to the country to help weather the economic impact of the COVID-19 pandemic.

Auction

In March, the Bank of South Sudan had auctioned to the market a $100 loan from IMF on weekly basis to neutralise high currency exchange rates of the hard currency against the dollar and lowering commodity prices.

The bank was able to collect 50 billion SDG through the weekly auction.

“Central Bank is going to stop daily adjusting rate by injecting more dollars into the market weekly but to adopt the marketing rate known as a reference rate, which will be calculated through 407 to 4012 average rate and considered convergence. This is what we call transaction cost with considered small margin rate differences,” Governor Dier Tong Ngor said.

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