The Bank of South Sudan has reserved billions of pounds as a result of the introduction of the 500 and 1000 banknotes, an official said.
The Director-General for Banking Supervisor Research and Statistic of Bank of South Sudan, Moses Makur Deng, hailed the introduction of big notes saying people can now carry huge amounts of money in their pockets, which they can use quickly.
He said before the introduction of the bigger denominations, people used to keep a lot of money in houses instead of letting them circulate.
“When there were small denominations people feared to carry their money and the bank kept giving money out but once it got into their hands they keep them in their houses,’’ Deng revealed.
“Currently there is a lot of reserve of South Sudanese Pounds [worth] billions because with the availability of the 500 and 1,000 notes, people can carry and use them very fast compared to when we have small notes [which] carrying was a problem,” Makur said.
He made the statement on Wednesday during the launch of policy research that focuses on the South Sudanese community in Australia.
In February 2021, Central Bank launched an SSP 1,000 banknote that they said would rejuvenate the strength of the local currency against the dollar according to Central Bank Governor Dier Tong Ngor.
Ngor averred that the introduction of the new banknote could inspire the SPP to the glory days of 2011- just before the country entered into turmoil.
He said the new higher value denomination would only partially restore the dollar value of the SSP like in 2011. He added it high time to reduce the deadweight loss and high transaction cost in making high-value purchases in a cash-based economy like South Sudan.
He cautioned that the move should not be interpreted to mean that the country has shelved the drive for digital and mobile money transfers. Ngor said cash remains the ‘king’ mode of transaction but e-payment platforms will be encouraged as well to remove barriers of inconvenience.
He said the decision was in line with the international standards of currency management which requires institutions like the Central Bank to revise their denominations from time to time.
He said International best practices require central banks to review their currency regimes at intervals of five to ten years to ensure that demand for banknotes is well aligned with economic activity. He said this would address weaknesses and challenges associated with managing notes and coins in circulation.