South Sudan introduced new currency

South Sudan recently become the newest country of the world on 9 Jul 2011 (I was reading this article which said despite 22 years of fall of Berlin Wall, around 28 new border wall have come up since the fall. In 44 years before the fall only 11 new borders came up. Not sure whether South Sudan is included or not).

There was a nice discussion from development econs on what South Sudan do. Duflo-Banerjee said to introduce social spending programs. Blattman dissented and said these programs should be tried in 2021. It should be made into a proper country first.

Now the latest is just after 9 days on 18 Jul, 2011 it introduced a new currency – South Sudanese Pound (Here is a congratulations from Bank of Kenya Governor).  It was being assumed that it would instead have a currency union for sometime with Sudan and use the Sudan Pound.

An official has said this would be economic war as people would struggle with old currency. The new currency has hurt North Sudan and they are unwilling to exchange:

Southern Sudanese official on Monday accused northern Sudan of declaring “economic war” by issuing a new currency just weeks after the south’s independence, a move that could leave the struggling new government with coffers full of useless currency.

Pagan Amum, secretary-general of the south’s ruling Sudan People’s Liberation Movement, said the Khartoum government violated an agreement to not introduce a new currency until six months after the south did. He said the move would cost the southern government at least $700 million — an added challenge as the undeveloped new country begins delivering basic needs such as education, health services, water and electricity to its more than 8 million citizens.

“The government of Sudan has literally declared and engaged in economic war against the newborn Republic of South Sudan,” he said. “This is a hostile act. This is contrary and against all our aspirations and expectations that we were going to emerge as two independence countries … that are good neighbors cooperating in all fields.” He said many South Sudanese are still holding old Sudanese pounds, and that the northern government has declared those illegal tender.

However, ruling party says no such problems and transition will happen. There are some problems with currency already:

There was immediate concern from the public since these new notes lack a date of issue on them. CBSS Governor Elijah Malok tried to downplay the missing date, pointing out the notes do have serial numbers and that British currency does not carry dates.

In the July 19 Sudan Tribune, citizen David Lemi said, “I am happy that we now have our own currency despite some of my observations in the design of the currency itself,” adding “However, my main immediate concern is why the deliberate omission of the year 2011 in which the new currency was printed?”

According to the newspaper, the concern regarding the lack of a date on the notes is that the date might become important in the future when checking for defects or counterfeits of the currency for that particular year.

Another South Sudan citizen, Nhial Tut, said, “Bank Governor Elijah Malok should not compare this economically fragile one-week-old Republic of South Sudan to the British government which has been there for centuries and already secured a stable economy free from corruption.” 

 Interesting developments. Curious to know what prompted the South Sudan to launch a new currency so soon? National Pride or experience with ECB suggested currency union not the right way…:-)

One Response to “South Sudan introduced new currency”

  1. Wilfred Laurenza Says:

    Wilfred Laurenza…

    […]South Sudan introduced new currency « Mostly Economics[…]…

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