Central bank chief says local currency weakened by high dollar demand

JUBA – South Sudan’s central bank governor, James Alic Garang, attributed the weakening South Sudanese Pound (SSP) to increased public demand for U.S. dollars, according to a press conference held in Juba on Friday.

Governor Alic explained that the widespread use of dollars within South Sudan, despite a 2023 directive promoting local currency transactions, was causing the SSP to depreciate.

“The public demand for the U.S. dollar is so high,” Alic said. “You still need dollars for most cross-border transactions. So, it’s not a failure of the (local currency directive) but a reflection of this high public demand.”

He highlighted the dependence on dollars for importing essential goods from neighboring East African countries.

“People need dollars to buy food, sugar, even basic items like potatoes or tomatoes, which are often sourced from East Africa or Dubai,” Alic stated.

Alic clarified that the directive promoting the SSP did not entirely ban dollar use.

“No country except the United States uses only its own currency domestically,” he said. “The directive encourages local currency transactions for most domestic activities, with exceptions for specific needs.”

The governor emphasized the bank’s ongoing efforts to educate the public about the value of the SSP and encourage its use in everyday transactions.

Alic also acknowledged the necessity of hard currency for international obligations.

“We have international subscriptions, like the United Nations, that require payment in hard currency,” he said. “We also need dollars to purchase essential machinery from abroad.”

Governor Alic concluded by explaining that the high demand for dollars reflected the need to import essential goods and fulfill international commitments, not a lack of confidence in the SSP.