Bank of South Sudan declares illegall the use of Ugandan Shilling
Dec 6, 2006 (JUBA) — The Bank of Southern Sudan has called the use of the Uganda shilling in South Sudan illegal, while preparing to introduce their own currency, the pound.
The bank said Sudanese officials are to visit Uganda and other countries to work out the replacement of foreign currencies in South Sudan, The Juba Post reported.
“The use of foreign currencies is too hazardous to our economy,” said Kornelio Koriom, the director-general of the Bank of Southern Sudan.
The Uganda shilling freely circulates in South Sudan, especially in Yei. Other currencies in circulation include the Kenya shilling, the Ethiopian birr, and the old Sudanese pound. The efforts to phase out the use of the non-Sudanese currencies are directly linked to plans to introduce the new Southern Sudan currency, the pound, due on 9 January.
The new pound will exchange for 100 dinars – the equivalent of 1,200 Uganda shillings (0.66 dollars).
“We are working tirelessly to make sure that the new currency comes into circulation by that date,” Mathiang Ajing, the Central Bank of Sudan manager, Khartoum branch, said.
Bank of Uganda communications chief Juma Walusimbi said the development was not unusual since South Sudan is establishing structures to run its own economy.
“It is a healthy development especially since South Sudan has been pacified and has to operate an economy with its own currency that is convertible with that of its neighbours,” he said. He said the central bank encourages cross-border trade using appropriate currencies.
“The development will not have any adverse effect on the shilling because it is a free floating currency,” he said. Walusimbi noted that the development should not dampen the thriving cross-border trade between the two countries.
“Traders carrying out trade and those trying to invest in South Sudan should be confident because it is a normal development. They will be able to trade the shilling with the new pound to carry out transactions.”
(New Vision)