(JUBA) – A senior member of the Transitional National Legislative Assembly has said that a growing lack of trust between commercial banks and the Bank of South Sudan is a major factor behind the ongoing shortage of cash in the country.
Michael Ayuen, Chairperson of the Committee for Finance and Planning, said parliamentary findings show that some commercial banks are reluctant to keep their reserves with the central bank because they are unsure whether they will be able to withdraw funds when needed. He said this lack of confidence has encouraged businesses and members of the public to hold cash privately instead of depositing it.
Speaking during an interview with Eye Radio, MP Ayuen said this behaviour has reduced the amount of money circulating in the banking system and worsened the liquidity crisis. He said commercial banks and the central bank both need to rebuild confidence in order to restore normal operations.
He said commercial banks report that when they deposit funds with the central bank, they sometimes face difficulties accessing the same funds to meet transaction needs. This uncertainty, according to Ayuen, has led many businesses and individuals to store cash outside the banking system, further reducing available liquidity.
The MP said the effect is felt throughout the economy, with traders and ordinary citizens struggling to access money for everyday transactions, and bank queues becoming common.
Ayuen also encouraged the public and private sectors to increase local production, especially in agriculture. He said that producing more goods domestically would reduce demand for imported products and lower pressure on foreign currency.
He said the high demand for United States dollars remains a major factor driving the liquidity crisis. The MP noted that people who want to import goods must first obtain dollars, and this pushes the value of the dollar higher while increasing the demand for large South Sudanese Pound notes.
The Ministry of Finance and the Bank of South Sudan recently encouraged citizens to use digital payments to limit reliance on cash. However, many markets and service providers still operate largely in physical currency.
The official exchange rate at the central bank stands at about 4,600 SSP per USD, which is equivalent to roughly 0.65 USD per 4,600 SSP. However, commercial banks and traders are operating closer to 7,200 SSP per USD, which is approximately 1 USD = 7,200 SSP, reflecting market conditions as observed in late 2025.
| Exchange Rate | Value in SSP | Value in USD |
|---|---|---|
| Central Bank Rate | SSP 4,600 | ≈ $0.65 for 4,600 SSP |
| Commercial / Market Rate | SSP 7,200 | ≈ $1.00 = SSP 7,200 |
The gap between the official and market exchange rates has fuelled speculation, limited confidence and encouraged the holding of cash outside the banking system.
Ayuen said restoring trust in the financial system will require coordinated action by the central bank, commercial banks, and government regulators. He added that improving domestic production, encouraging digital payments and stabilising the exchange rate are key steps to easing current pressures.
