The central bank of South Sudan has dropped restrictions preventing commercial banks from selling dollars at prices of their choosing, changing a policy has continued throughout the two-year civil war.
“The current fixed exchange rate of South Sudan Pound against U.S. dollar will be abandoned,” Finance Minister Deng Athorbei announced on state television late on Monday. From now on he said the level of the pound “will be based on market forces.”
Commercial banks were informed of the change last night. Overnight, banks in the capital Juba were allowed to sell dollars at five times the price they had sold them the previous day.
KCB’s indicative rates this morning were listed at 16.50 SSP for buying South Sudanese pounds and 20.50 for selling South Sudanese pounds. Previously, the central bank had not allowed selling at more than 3.16 pounds to the dollar.
This represents a huge change of policy after an internal policy review at the central bank in recent weeks. Central Bank Governor Kornelio Koryom had hinted at changing the rate in an interview with Radio Tamazuj last week.
The central bank had held onto a fixed official rate of about 3 pounds to 1 dollar even as the currency fell steadily in value on the unofficial market after conflict erupted in December 2013. Traders and ordinary South Sudanese have struggled to secure dollars to pay for even basic imports or other essential items.