South Sudan has obtained $334 million from the International Monetary Fund (IMF) under general allocation of Special Drawing Rights (SDRs).
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IMF headquarters in Washington, D.C (AP)
The loan was approved by the Board of Directors and went into effect on August 23rd, 2021, according a South Sudan Central Bank statement.
South Sudan’s Central Bank governor, Dier Tong Ngor said the money from IMF would be improve the living condition of the people with sense of transparency.
"We also wanted to reiterate our commitment that this amount will be used in a transparent manner and that there will be accountability. The bank will open a special account for these resources, and we will make regular reporting on how these amounts are being used”, he told reporters in the capital, Juba Wednesday.
The funds, according to the governor of the Central Bank, will also help the country in sustaining the exchange rates and building foreign exchange reserves.
"The fact that we have huge improvements in oil prices gives us assurances that we would be able to support the exchange rate and that the exchange rate stability would be sustained. Of course, the additional money that we are getting from the IMF now will also help greatly for us to build foreign exchange reserves and these foreign exchange reserves will serve as buffers," he said.
He clarified that the $334 million allocation is not a loan, but part of South Sudan’s membership shares from the Special Drawings Rights (SDRs).
"These 334 million dollars is not a loan; it is an allocation. SDRs is an international reserves currency that helps member countries to improve their liquidity and to improve their reserves. What the IMF has done really is that the board decided to make allocation of SDRs to member countries. This allocation of 334 is our share as South Sudan," he added.
Ngor revealed that the country will pay the interest rate of 0.5 percent for the allocation per annum with no repayment schedule in place. The new funds come at the time when the bank is implementing essential economic reforms, including monetary and far-reaching foreign exchange market reforms.
Efforts aimed at stabilizing and strength the purchasing power of the local currency are being supported by the significant recoveries from the oil prices and the two IMF disbursements under Rapid Credit Facility in November 2020 and March 2021 for the combined financing of USD 225 million.
Source: Sudan Tribune