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 July 09.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 currency will replace the Sudanese Pound, which itself is getting a modification. Plane-loads of cash arrived in the capital of Juba last week, and the new bills are now entering into circulation. The bills come in denominations of one, five, 10, 25, 50 and 100-pound notes. The currency is being printed by the British company De La Ru which has offices in Fleet Street in London. The monetary transition will take about three months to complete and the exchange rate to the Sudan Pound has been set at one-to-one. The dollar-to-pound exchange rate is slightly under three-to-one.
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 two 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.
Plane-loads of cash arrived in the capital of Juba last week, and the new bills are now entering into circulation. 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.
Not to be out-done, Sudan’s President Omar al-Bashir said Sudan will introduce a new currency as well this month, part of an economic austerity plan. “The package of the economic measures includes issuing a new currency in the coming days,” Bashir said. 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]. The new South Sudanese currency features the image of the late Dr John Garang, the rebel leader who led South Sudan in the civil war that tore apart greater Sudan for decades. Garang served as the unofficial president of South Sudan from January to July 2005. He died in a helicopter crash on July 30, 2005.