South Sudan’s central bank has slashed its benchmark interest rate by 200 basis points to 13% to help the young African economy cope with the effects of the novel coronavirus, its governor said on Monday.
“This means commercial banks will find space to reduce the cost of borrowing,” Governor Gamal Abdalla Wani told a news conference in the capital Juba on Monday.
The governor said the flow of credit to the private sector had started to decline during the coronavirus outbreak and that the policy easing was aimed at accelerating lending.
South Sudan depends almost entirely on oil sales for its public revenues and its economy is also expected to be hit by the recent sharp drop in oil prices.
The policy move would help in “restoring confidence, while providing additional liquidity supporting the banking sector to address the fall in demand for credit,” the governor said.
South Sudan’s economy is still reeling from the devastation caused by years of civil war between government forces under President Salva Kiir and those allied with vice president Riek Machar.
The country has so far recorded only six cases of coronavirus, but neighbours like Uganda, Kenya and Ethiopia, on which it depends for imports, have registered bigger case loads and implemented strict lockdowns.