South Sudan government has jettisoned a plan to introduce a new currency in the North African country.
Minister of Information and Broadcasting, Michael Lueth, announced the reversal on Thursday as the South Sudanese Pounds (SSP) continues to depreciate against the U. S. dollar and other major currencies due to the economic crisis.
Speaking in the country’s capital, Juba, Lueth said the move to change the local currency was only a mere proposal by the economic crisis management committee as a means to salvage the economy from further collapse but was not agreed and passed by the cabinet.
“The change of national currency (South Sudanese Pounds) was brought in the discussion of previous cabinet meeting as one of the long-term economic measures, but it was not agreed and passed by the council that time,” Lueth said.
In September, President Salva Kiir established an economic cluster committee to investigate mismanagement of non-oil revenue and also to come up with recommendations to revive the falling economy.
Leuth also said the government was in the final process of acquiring a loan that would be injected into the market to stabilise the deteriorating economy.
The minister had announced the planned change in South Sudan’s currency last Friday. He had at the time said one of the problems facing the economy was that “most citizens are actually hoarding currency in their houses.”
“This is a normal situation that has been happening and there is always a solution. So, the cabinet has decided that the currency should be changed,” he said.
Adding, “The currency should be changed so that anyone who does not take his money to the bank is left out and will lose that money,” Lueth said.
“This advice goes to those who are hoarding money; hurry to the banks and put the money in the banks, so that you can avoid queuing up when the time comes for the exchange of currency.”
In August, the central bank said the government had run out of foreign reserves to control the hyperinflation rate in the world’s youngest republic.
As of Thursday, 100 dollars was selling at between 70,000 to 73,000 South Sudanese pounds (SSP) due to the low volume of SSP circulation in the market amid skyrocketing prices of commodities due to speculation.
The South Sudan economy has been shattered by several years of civil war and this coupled with the disruptions caused by the COVID-19 pandemic has led to a drastic drop in oil prices, thus dropping the country’s revenues.