South Sudan clamps down on illegal forex trade amid currency regulations

Refugee women from Sudan exchange their Sudanese pounds for South Sudanese currency with money changers at the Joda border crossing in South Sudan. The power struggle in Sudan, which has been ongoing since mid-April 2023, has triggered the world's largest refugee crisis, according to the UN, with more than eight million refugees. While many of these people are seeking safety from the fighting within Sudan, others have fled to the neighboring countries of South Sudan or Chad.

Source: dpa

The Central Bank of South Sudan has taken decisive steps to curb illegal foreign currency transactions in the market, announcing stringent measures to regulate the sector.

Speaking at a press conference in the capital city of Juba on April 5, Central Bank Governor James Alic Garang announced the bank's commitment to enforcing regulations on foreign currency trading.

Garang noted that the grace period of 45 days provided for all informal currency traders to obtain licenses for their operations had ended, however, he indicated that the bank remained open to receiving clients willing to comply with registration requirements.

"Informal forex trading without proper authorisation is now deemed illegal in South Sudan. We have taken all necessary regulatory steps, and henceforth, any sale of foreign currency without a license will be unlawful," Garang told reporters.

The crackdown on illegal forex trading marks the final efforts initiated by the Bank of South Sudan earlier this year.

In February, the bank issued a notice urging unauthorised forex dealers to register formally as currency exchange agents and adhere to relevant laws.

"We have done everything in our power as the regulator. From today onwards, unauthorised selling of foreign currency is prohibited. We expect transactions to take place within licensed premises, similar to other legitimate businesses," Garang added.

The practice of open street forex trading has been prevalent in South Sudan since gaining independence from Sudan in 2011. However, the central bank has been proactive in enforcing regulations to formalise the sector and ensure compliance with legal requirements.

In November 2023, the central bank mandated all informal currency traders to obtain licenses, requiring a $50 registration fee and a $1,000 capital deposit to maintain operations.

Meanwhile, the exchange rate between the South Sudanese Pound (SSP) and the US Dollar (USD) stood at 130.26 SSP per 1 USD as of April 5, 2024.

Edward Sakyi