(JUBA) – The Bank of South Sudan (BOSS) has announced a formal invitation for commercial banks to participate in a new foreign exchange auction, scheduled for Thursday, 31 July 2025. This step represents a significant attempt by the central bank to reassert control over the currency market and restore confidence in official monetary operations following years of economic turbulence.
Under this scheme, eligible commercial banks are allowed to submit competitive bids quoting both the exchange rate they are willing to pay and the amount of US Dollars they wish to purchase. Submissions will take place between 9:00 and 10:00 AM local time, through the Refinitiv electronic platform or via email for banks without platform access. Adjudication will conclude by 11:00 AM.
While this appears to be a technical announcement, the implications are broader and worth analysis. The auction is more than a financial transaction. It is a policy signal. It suggests that the Bank of South Sudan is moving away from opaque currency allocations toward a more structured, rules based monetary environment. This aligns with calls from both domestic stakeholders and international financial institutions for more transparency in currency management.
Why this matters
The South Sudanese Pound (SSP) has been under prolonged pressure due to the country’s dependency on oil exports, persistent budget deficits and weak foreign investment. Foreign exchange inflows remain limited, and the parallel (black) market has gained dominance over official currency distribution channels, leading to large exchange rate distortions.
The central bank’s introduction of an auction system provides an open market based approach for currency allocation. Instead of fixed or arbitrary allocation rates, banks now compete transparently for available foreign currency. This is expected to:
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Reduce black market dependency: By improving access to US Dollars through the official banking system.
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Enhance price discovery: With rates set by competitive bidding rather than administrative controls.
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Strengthen public trust: By demonstrating greater accountability in foreign exchange policy.
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Improve efficiency: By channelling foreign reserves to the most competitive and needy institutions.
Immediate Requirements
Successful bidders are required to deposit physical SSP cash into their settlement accounts at the Bank of South Sudan immediately after results are announced. Full settlement must be completed within 24 hours. Banks are strongly encouraged to use wire transfers to their Nostro accounts for efficiency.
Strategic Importance
While South Sudan’s foreign exchange reserves remain fragile, this auction mechanism allows the central bank to ration limited dollars more efficiently. Instead of direct interventions or administrative controls, BOSS can use auction results to monitor demand and control liquidity without distorting the market.
Additionally, this approach helps banks to plan their dollar needs more predictably. It could reduce the spread between official and parallel exchange rates, which has often served as a breeding ground for speculation and informal currency dealings.
Challenges Remain
However, questions remain about the frequency of these auctions, the volume of dollars to be made available, and whether the process can be sustained without external donor support or a rise in oil revenues. If BOSS cannot meet dollar demand consistently through this channel, the public and banks may revert to informal alternatives.
Also, ensuring that only genuine demand is served such as for medical supplies, fuel, education and productive imports will require coordination with the Ministry of Finance, commercial banks and possibly customs authorities.