Central Bank warns against hoarding of currency

In a circular describing two hoarding illegalities, BoSS says the directive seeks to curb speculative practices that destabilize the foreign exchange and goods markets

By Aguok Chok

The Bank of South Sudan (BoSS) has issued a stern warning against hoarding of currency and vowed to prosecute the perpetrators.

In a circular issued on Wednesday, Dr. Addis Ababa Othow, the Bank’s Governor, said, “The Bank of South Sudan (BoSS), in exercise of its statutory mandate under Section 12 of the Bank of South Sudan Act, 2011 (as amended 2023), read together with Section 154 of the Banking and other financial institutions Act, 2012 as amended, 2023 and in line with its responsibility to maintain monetary and financial stability, ensure price stability, safeguard the value of the South Sudan Pound (SSP), and protect the economic interests of the public, I do hereby issues this circular to all regulated financial institutions, businesses, and the general public.”

The Bank defined hoarding in two forms, including Currency Hoarding, which means the deliberate accumulation, withholding, or storage of currency (foreign or local) in excessive quantities outside the banking system with the intent of creating artificial scarcity, influencing exchange rates, or engaging in speculative trading.

Meanwhile, commodity hoarding is the deliberate withholding of essential goods (Gold and other precious metals) from the market to create shortages and manipulate prices.

According to the Central Bank, the circular seeks to curb speculative practices that destabilize the foreign exchange and goods markets and discourage the holding of currency outside the financial system.

“[ To] ensure efficient circulation of currency to meet the needs of the economy, support the government’s broader policy objectives of stabilizing the exchange rate and controlling inflation; provide for a maximum limit of US dollars 10,000 or its equivalent in SSP. Any amount above this threshold should be deposited in the bank account,” the statement read in part.

According to the statement, the circular applies to all licensed financial institutions, currency exchange agents, and individuals engaged in currency or commodity trade.

It strictly prohibits hoarding of both currency and commodities, accumulation of foreign currency for non-productive purposes, and informal black-market dealings.

Governor Othow further directed financial institutions to play a strong role to ensure transparency in all foreign exchange transactions, report excess foreign currency holdings to the Bank of South Sudan weekly, and monitor and report suspicious accumulation or movement of funds by customers.

He also urged the financial institutions to maintain proper Know-your-Customer (KYC) and Anti-Money Laundering (AML) controls to prevent hoarding and speculation, and cooperate with BoSS inspectors and provide timely access to records.

“Any institution, entity or person found in violation of this Circular shall be subject to one or more of the following: seizure and forfeiture of the hoarded currency or assets, fines imposed by the Bank of South Sudan, suspension or revocation of licenses, freezing of accounts associated with hoarding activities, and criminal prosecution under applicable laws, which may include imprisonment,” he asserted.

The governor said the Bank of South Sudan in collaboration with relevant security organs and other government authorities, it will conduct spot checks, audits, and compliance reviews; undertake regular market surveillance of forex and goods commodities markets.

The Bank vowed to investigate and prosecute offenders in accordance with the law, as well as publish sanctions against offenders as a deterrent to others.

Dr. Othow called on the public to avoid engaging in currency hoarding or unauthorized practices, and report any known cases of hoarding to the Bank of South Sudan or law enforcement agencies.