South Sudan establishes Central Bank as it receives its new currency

[News_Editor]

South Sudan establishes Central Bank as it receives its new currency

2011-07-15 18:33:57 GMT+7 (ICT)

JUBA (BNO NEWS) -- South Sudan President Salva Kiir Mayardit on Friday signed a law to formally establish the Central Bank of South Sudan in the newly-formed African country, the government said. The bank has also received its first delivery of the South Sudan Pound.

South Sudan became the world's newest country when it broke away from Sudan on Saturday morning, following decades of civil war that left millions dead. The new nation was formally accepted as a Member State of the United Nations on Thursday.

After the signing ceremony on Friday in the capital of Juba, caretaker Minister for Justice John Luk told reporters that the law will govern the operations of the Central Bank of South Sudan. He said the law contains provisions linked to the functions of the Central Bank in monitoring policy, price stability and stable exchange rate.

Luk also announced that the Central Bank of South Sudan received its first delivery of the country's new currency on Thursday. The new nation is currently using the Sudanese pound until it has completed the distribution of the South Sudanese Pound.

The new currency is expected to be released into the market by Monday and will at first have the same exchange rate as the Sudanese Pound. But Elijah Malok, the head of the Central Bank, said the value may change in the coming weeks based on market factors.

On Tuesday, Malok said that negotiations are still underway with the Central Bank of Sudan to redeem the old currency from South Sudan which he estimated to be about 1.5 to 2 billion. He said the value at which the old currency will be redeemed is still being negotiated.

The South Sudanese Central Bank head also said that South Sudan will not ban the Sudanese Pound and explained that it may be used for cross-border trade transactions. But Malok said that its continued use would depend on whether Sudan chooses to keep it or not.

The design of the new currency of South Sudan was also presented to the media on Tuesday. Malok said the South Sudan Pound will have bills of 1, 5, 10, 25, 50, and 100. Coins with smaller values are still being minted.

The South Sudanese government has said it does not yet know what the anticipated inflation levels will be. Malok explained that inflation in the region, especially in Uganda and Kenya, will affect South Sudan in the short-term until it is able to tilt the trade balance in its favor.

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