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South Sudan issues new banknotes amid rising inflation

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Central Bank governor, Dier Tong Ngor speaks to reporters in Juba, February 9, 2021 (ST)
February 9, 2021 (JUBA) – South Sudan’s Central Bank on Tuesday issued a 1,000 South Sudanese Pound banknote as it struggles with hyperinflation amid dwindling foreign reserves.

Speaking to reporters in the capital, Juba, the Central Bank governor, Dier Tong Ngor said the bank will henceforth embark on a nationwide campaign to educate the public on the new notes.

"It is in the view of the need to make our currency more convenient to use that we are today introducing the SSP 1000 banknote into circulation to complement the existing banknotes to ensure convenience, and bring about efficiency in the printing of currency to generate savings for the country," he explained.

Ngor said the world youngest nation has, in the past few years, grappled with how to address a situation characterized by high inflation, including perpetual depreciation of the currency which has eroded public confidence and monetary value of the banknotes.

"This new higher value denomination will only partially restore the dollar value of SSP 10 in 2011, but high enough to significantly reduce the deadweight loss and high transaction cost in making high-value purchases in a cash-based economy like South Sudan," he stressed.

Several economists have questioned the impact the new banknote will have on economic recovery, citing further destabilization of consumer prices and acceleration of inflationary behaviours.

South Sudan depends on oil revenue for 98% of its budget, but production has since decreased significantly due to a political conflict which erupted in December 2013, causing most oil companies to cease explorative plans and shut down operations in the oil fields.

(ST)

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