South Sudan Pound Narrows Gap With Street Rate After Central Bank Interventions

South Sudanese pound banknotes (Adrienne Surprenant/Bloomberg)

(Bloomberg) -- The gap between South Sudan’s official and street rate significantly narrowed in a week, after central bank interventions.

The spread between the South Sudanese pound and the unofficial market rate was almost 8% on Friday, compared with about 41% a week ago. The currency was trading at 2,766 against the dollar on Friday, compared with 3,000 on the unofficial market.

The change is largely due to the central bank injecting dollars into the foreign exchange market, reintroducing lower denomination notes and an increase in electronic payments, Governor James Alic Garang said in a text message.

They add to other steps taken by the Bank of South Sudan earlier this year to stabilize the currency, such as making it illegal to sell foreign exchange without a license and getting law enforcement agencies to crack down on those who do.

The currency has lost 64% of its value against the dollar this year as oil exports, its main source of foreign income, fell due to delays in repairing a broken pipeline that ships two-thirds of South Sudan’s crude through Sudan, which has been at war for more than a year.

Landlocked South Sudan, which declared independence from Sudan in 2011, still relies on its northern neighbor to export its oil.

Source: https://www.bnnbloomberg.ca/investing/2024/09/13/south-sudan-pound-narrows-gap-with-street-rate-after-central-bank-interventions/