(Bloomberg) -- South Sudan’s central bank ordered unauthorized currency traders to gather in groups at designated streets of the capital next week as part of a plan to regulate the nation’s parallel foreign-exchange market.
The central bank wants money changers — who usually ply Juba’s streets waving bundles of cash at passing motorists — to congregate at four areas on Dec. 4, Governor James Alic Garang told reporters on Friday in the city. The plan is for them to form associations by Dec. 14 and then await further instruction on how to obtain licenses.
“Unauthorized dealers can operate in the open under shades or under an umbrella for a period of 10 days,” he said. “The shade can be under trees.”
The measure is being introduced to curb speculation in the South Sudanese pound, which has lost about a third of its value this year to about 1,085 per dollar, according to central bank data. The measure is among a series of reforms being implemented by the government as it tries to rebuild an an economy shattered by conflict since it seceded from Sudan in 2011 and, more recently, the coronavirus pandemic and historic floods.
The city council and law-enforcement agencies will deploy personnel to ensure compliance with the new foreign-exchange directive, Garang said. In the longer term, currency traders will have to have a permit to operate, and will be required to issue receipts and pay taxes, he said.
“Regulating of the currency is in the best interests of the bank, to allow us to pursue our mandate and allow us also to improve the economic situation of this country,” he said.
The authorities also plan to start auctioning Treasury bills in the coming weeks, in what will be at least the third attempt to use the government-funding instruments since the country gained independence more than a decade ago.
The bank first launched Treasury bills in 2012, without success. A second attempt came in 2016, but only lasted until April 2017 as people stopped investing in the securities because of accelerating inflation and a lack of a secondary market to trade them, according to a US State Department report.
The last attempt failed because when repayment of the debt fell due, “we were unable to meet those and so the market fell apart,” Garang said. “But we believe today that we are trying to build trust between the fiscal authorities and the commercial institutions.”
Sales of the debt will begin by January at the latest, Garang said.
“The structure is already in place,” he said. “What needs to be done is to dust something here and to twist something there and to kick start.”
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