An economic expert has warned of hyperinflation in South Sudan as a result of the recent dollars auctioning to commercial banks to resuscitate the already fragile economy.

The Central Bank of South Sudan (BOSS), on Wednesday auctioned US$3 million to 20 commercial banks in an effort to stabilise economy and check inflation.

The next phase will commence this week when additional US$5 million will be injected to include auctioning to forex bureaus on weekly basis as per announcement by the bank at a press conference last week.

Despite appreciating the good move, Dr. Abraham Kuol Manyuon, Dean of School of Social Science at the University of Juba said it could result to hyperinflation if not handled right.

“You know in South Sudan here people come up with very good decisions to help the general public, but such decisions are not implemented. If this thing is to be done in a good way that it had been intended, then we would expect the stabilisation of foreign currency in the market,” he said.

“But if it is not done in a proper way, then it will be a disaster because it will lead to hyperinflation, especially if the Central Bank follows the parallel market,” Dr. Kuol said.

South Sudan’s economy has gone from bad to worse since the 2013 conflict broke out opening floodgates to runaway inflation.

According to the World Bank, over 60 per cent of South Sudan population is living below poverty line with 42 per cent surviving on less than $2 per day.

The cumulative effects of years of war which destroyed people’s livelihoods, has placed nearly 70 per cent of the population in dire humanitarian situation where about 6 million people are facing acute food insecurity.

According to a humanitarian report in late 2020, 1.4 million children under the age of 5 years were expected to be acutely malnourished this year.

Dr. Kuol called on the BOSS to effectively manage the process so as to achieve the intended purpose of stabilising the country’s economy.

In March this year, the BOSS introduced 1000 banknote in a bid to reduce inflation and portability of SSP which has lost its value against the United States dollars.