South Sudan started rolling out its new currency on Monday – the South Sudan Pound – escalating a point of simmering disagreement with Khartoum after the country split away from the north on 9 July.[hidepost=9]
South Sudan became the world’s newest nation after seceding from Sudan under a 2005 peace deal that ended decades of civil war, but the two sides have yet to agree on how to manage the oil industry, split national debt and other issues.
The new nation’s announcement last week that it would launch its own currency earlier than expected added urgency to a dispute over what to do with the 1.5 to 2 billion Sudanese pounds in circulation in the South.
“It is out, we have launched. The president came this morning and changed some money. It is in operation now,” South Sudan’s Central Bank Governor Elijah Malok told Reuters, adding the currency was already being used on Juba’s streets.
South Sudan’s new currency is being exchanged at a one-to-one rate with the existing Sudanese pound. Malok has estimated it would take between one to three months to replace the pounds in circulation now.
The move was complicated by Sudan’s announcement that it would also launch a new currency, which the country’s central bank governor described as a “precautionary measure” to protect Sudan’s economy .
Sudan is trying to deal with high inflation and the loss of about three quarters of the united country’s roughly 500,000 barrels per day of oil output after the south seceded. It is eager to fend off any more economic disruption.
Negotiations are currently stuck on whether Sudan should buy back the Sudanese pounds circulating in the South. Sudan says the notes will be worthless.
“We do not want to buy it. We want them to surrender it to us because it is valueless,” Sudan’s Central Bank Governor Mohamed Kheir al-Zubeir told reporters on Saturday.
South Sudan’s Malok said the new country had not decided what to do with the old currency if Sudan refused to accept it.
“If they don’t take it, we don’t know what we will do with it,” he said. “We will still try to come to an arrangement (with Sudan).” (Reuters)