JUBA, July 27 (Xinhua) -- The Bank of South Sudan on Thursday announced new monetary policies that seek to avert soaring inflation, regulate trading in foreign currency and combat money laundering and financial crime.
Central Bank Governor Othom Rago Ajak told reporters that the bank is implementing major financial sector reform strategies it developed in May that seek to control inflation, combat financial crime and support the existing monetary policies.
The new policies include, adoption of new anti- money laundering policy, which will guide the bank in establishing any business relationship with other financial institutions and another policy seeks to toughen transaction in foreign currency among others.
The foreign exchange proceeds policy requires all business entities and organizations to open special accounts with the central bank for foreign exchange transactions.
"The aim of this policy is to better manage foreign exchange proceeds, resulting from the purchase of foreign exchange from the accounts relating to UN agencies, international Non-Government Organizations, oil companies and others," Ajak said.
After a meeting with board members of the central bank, Ajak said all licensed financial institutions have been directed to implement the new directives immediately.
War-torn South Sudan depends on oil revenue for 98 percent of its budget, but production decreased significantly due to civil war that erupted in December 2013, causing most oilfields in the country's oil-rich northern region to shut down.
This led to a fall in production to less than 130,000 barrels per day (bpd) from 350,000 bpd in 2011.
The east African nation is currently struggling with hyper inflation amid shortage of foreign reserves to support imports.
The Bank of South Sudan said in May that it would engage in major restructuring and reformation of its system and financial sector in a bid to combat the biting economic crisis.
The strategies include, strengthening financial sector regulation, supervision, adaptation of a sound exchange rate policy, public debt management and developing a financial regulatory framework that is compatible with international standards. Enditem