South Sudan’s government has directed that transactions in the US dollar should be suspended and instead all transactions should be executed in the local currency, the South Sudanese pound (SSP).
Most transactions in the country are carried out using the US dollar, largely due to hyperinflation and the volatility of the local currency.
However, the Bank of South Sudan has banned the use of the greenback and directed that all commercial contracts be signed in the local currency.
“That is a clear directive from the Central Bank that all the transactions in South Sudan must be done in our currency. So all commercial contracts must be signed in our local currency,” Michael Makuei Lueth, South Sudanese Information minister said.
The latest directive by the Bank of South Sudan deals a major blow to importers, hotels, restaurants, travel and tour operators, and the operations of regional banks such as KCB, Equity, Stanbic and Co-operative, which are struggling to survive in an economy plagued by hyperinflation and political instability.
The directive on the use of South Sudanese Pound is one of the measures recommended by a committee appointed by President Salva Kiir to help address the country’s economic crisis.
A seven-year civil war that ended in 2020 affected the country’s economy because of the collapse in oil production in areas affected by the conflict.