Link: https://allafrica.com/stories/202011100241.html
South Sudan plans to adopt monetary policies because of the current state of the South Sudanese pound. The newly appointed governor of the central bank believes tightening its monetary policy to mitigate rapid depreciation is the option to take. Of these policies include an increment of bank interest to 15% and to introduce its own bills to manage liquidity. The causes for depreciation include Covid-19, low prices of oil, and the past civil war. The article stated that $100 dollars of oil sells for 17,100 pounds at the bank, while on the black market its about 5700 pounds. The option for a new currency is still being debated to this day by the Council of Ministers.
A major cause for the depreciation of the South Sudanese pound is Covid-19 and its effect on globalization, as said on the article we read for class. If South Sudan created a new form of currency, I do not believe it would solve anything, but if this continues, then the monetary value of the pound will basically disappear, as they already experience 476% inflation. 55 pounds equal $1 and that seems crazy to me. These prices create problems for buying commodities for the average consumer, and for the traders that have to import good as a living. Another civil war may break out if the problem is not solved. Switching to an allies currency might be an option, but I don’t know the logistics that go into that. The other option would to sell more oil to the US because our oil gas prices are going up.