JUBA – The Bank of South Sudan governor announced on Monday the institution intends to print more money in a short-term bid to address the dire shortage of cash in the market.
The central bank and other commercial banks in the country have faced severe cash shortages, where clients find themselves unable to withdraw their money when they need it.
Dr. Addis Ababa Othow – answering queries from the parliament’s Specialized Committee on Finance and Planning – stated that there is an urgent need for the bank to print more money.
“In the short-term plans, we have made it very clear that there is a need, an urgent need for us to print money just to meet the high demand right now on the liquidity,” he said.
Othow further said the bank is developing long-term strategies to ensure sustainable cash management, including the introduction of digital payment.
“On the medium terms and long terms, we are looking at how to address the issue of currency management.”
“We had already formed a committee headed by the first deputy governor to look into sustainable, long-lasting solution for cash management. But again, the bank is now championing what we call national payment strategy.”
Cash hoarding
In June, Dr. Othow, then the First Deputy Governor of the Bank of South Sudan, said the financial institution was working to address cash shortage by ensuring that money is stored in the banking system.
He blamed the liquidity issue on individuals and businesses storing cash outside the financial system.
According to him, the Central Bank and other commercial financial institutions are planning to bring back all the bulk of money outside the system.
He, however, did not specify how the process would be carried out.
“The cash in circulation is huge. What we do now as a Central Bank is to ensure that we bring back all this cash into the banking system,” he said.
‘Low investors confidence’
Robert Pitia, the Chairperson of Central Equatoria Chamber of Commerce, recently said political uncertainty in the country is a major cause of the current absence of cash in the market.
Pitia said the liquidity crisis is frustrating many businesses as traders do not get their money from the banks when they need it.
He stated that the political situation in the country has also caused investors to reduce their economic activities avoid putting their money in circulation.
“Political uncertainty is the major cause. You know, people reduce their economic activities because they don’t know what’s going to happen tomorrow,” he said.
“So, in such a situation, people will fear to invest. The government should make sure political situation is stable. It will encourage investors to come. People who are here also will start thinking of investing.”