Moving from a fixed to a floating exchange rate: the case of the South Sudanese Pound

The Government’s decision to peg its new currency, the South Sudan Pound (SSP) to the US dollar, was largely intended to protect against oil price volatility. Amidst falling oil prices and the outbreak of civil war, the Government rapidly depleted its USD reserves and spurred the emergence of a currency black market. This blog argues that the decision taken to float the exchange rate, by the Bank of South Sudan and the Ministry of Finance and Economic Planning on 14th December 2015, was the best option to avoid collapse of the SSP and the dollarisation of the economy.