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News

South Sudan president sacks central bank chief

President Salva Kiir has sacked the central bank governor a week after a Swiss firm offered to bail out the nascent state's empty coffers. If it goes ahead the loan would damage US efforts to isolate the Juba government.

According to a decree broadcast on state television on Saturday, the outgoing bank chief Kornelio Koryom Mayik has been replaced by economist Othom Ajak.

Kiir also removed the Deputy Governor of Central Bank John Dor Majok, Governor of Bieh State Gen. Peter Bol Kong, Latjor Governor Peter Lam Both, Deputy Minister of Finance Mary Jervas Yak and First Undersecretary of the Finance Ministry Salvatore Garang.

Mayik was reportedly dismissed due to concerns about high inflation and the depreciation of the South Sudanese Pound (SSP) against the dollar. The SSP fell over 10 percent in the first week of January to 105 from 90 alongside inflation hurtling from 17 percent in October to over800 percent. 

The central bank abandoned fixed exchange rates in December 2015.

The country's oil production has plunged and the economy is suffering after an armed conflict between Kiir and his former deputy Riek Machar started in December 2013. Tens of thousands have been killed and 3 million displaced.

Lifeline

The government received a financial offer from a European financier in early January, documents leaked to the South Sudan News Agency (SSNA) show.

Swiss Finance Luxembourg AG reportedly arranged the $105 billion (98 billion euros) lifeline deal to support the country's ailing budget. No details have been made public.

SSNA reports that Kampala and the Juba government had started looking for private financial help since October when it became clear the US was pursuing an arms embargo against the new country and had targeted sanctions.

South Sudan faces economic collapse after financial donors withdrew their support due to the ongoing civil war.

If the deal goes through, it would be a breakthrough for the Juba government and significantly hamper US efforts after it pushed the UN Security Council to isolate South Sudan and consider a draft resolution on targeted sanctions against several leaders in November.

Among those targeted is Sudan People's Liberation Army Chief of Staff and President Kiir's right-hand man Gen Paul Malong Awan.

jbh/kl (dpa, SSNA)

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