South Sudan central bank unveils plan to stabilize local currency, combat illicit financing

JUBA – South Sudan’s central bank announced on Monday it is implementing measures to bolster the local currency against the U.S. dollar and launched a project to strengthen its institutional and supervisory capacity to combat illicit financing.

As of Tuesday, 100 U.S. dollars was exchanged at South Sudanese Pound (SSP) 400,000 on the black market and SSP 2,982.0561 at the official rate.

Speaking to reporters in Juba, central bank governor James Alic Garang stated that the bank has intervened in the market by injecting hard currency to combat inflation and launched a 5-year project, financed by the World Bank Group, to strengthen the capacity of the apex bank and other affiliated institutions to track money laundering and terrorism financing.

“We intervene in the foreign exchange market whenever we have U.S. dollars. Additionally, we have initiated efforts to digitize the financial sector,” Alic told journalists in Juba on Monday.

Alic encouraged the public to open personal bank and mobile money accounts to facilitate cash transactions and stabilize the economy. He called upon commercial institutions to support individuals in opening bank accounts to streamline cash transactions and promote a cashless economy.

“You have witnessed previous attempts where we have urged commercial banks, households, and the private sector to ensure that individuals open bank accounts. By maintaining more of our reserves in banks and utilizing electronic payment methods, we can contribute to currency stability,” he stated.

The top financial official also advised government institutions to exercise fiscal prudence and adhere to budgetary spending, stating that the bank is assisting the government’s ability to generate revenue and strengthen the economy.

“This is our approach. Moreover, we are also advocating for and supporting the government’s efforts to boost local production, particularly in agriculture. By supporting the digitization of tax proceeds, we are playing our role in helping the government mobilize resources,” he said.

“Therefore, we need to mobilize resources, but simultaneously work to produce those resources and effectively manage them,” he added.

Alic announced that the bank would continue to strengthen monetary policy to stabilize the economy.

“Instead of intervening in the foreign exchange market, we have also introduced term deposit fertility, which is used to mobilize excess SSP in the market,” he said.

Alic said that the bank has also launched a project worth 18 million U.S. dollars to strengthen its institutional and supervisory capacity to promote financial integrity. He said the project’s main objectives include investing in strengthening the regulator.

“The Strengthening South Sudan Financial Sector (3SF) project, will enable us to modernize the bank, and at the same time to strengthen the broader financial sector in the country,” said Garang.

For her part, Maryam Salim, World Bank Country Director for South Sudan, said the fund will go a long way in supporting economic development and stability.

“The 3SF project represents a significant step towards creating a more stable, efficient and inclusive financial sector in South Sudan,” said Salim.

She said the project also aims to strengthen and modernize the central bank which is key for transforming the banking sector and spurring private- sector led growth. She said their support for South Sudan has moved from immediate needs to longer-term development to enable the country to progress.

“It is focused on institutional strengthening and rebuilding the credibility of the central bank to serve as a fundamental intervention to make a strong foundation for the sector’s development. The strengthening South Sudan Financial Sector project is crucial for maintaining stability and integrity within the financial system which in turn fosters trust and confidence among depositors, investors and the general public,” she said.

The project focuses on building the capacity of not only the central bank, but also the Financial Intelligence Unit (FIU) and other relevant authorities responsible for overseeing and enforcing financial regulations.