Reserve Ratio for Dollar Deposits Raised in South Sudan

(Juba) – The Central Bank of South Sudan (BoSS) has reduced its benchmark lending rate from 15 percent to 13 percent in a bid to ease the country’s ongoing liquidity crisis and support economic growth. The decision made during a meeting of the Monetary Policy Committee (MPC) is part of a wider effort to stimulate lending to the private sector and restore confidence in the financial system.

Governor Dr. Addis Ababa Othow, who recently assumed leadership of the central bank, chaired the meeting and signed the official statement released on June 21. According to the statement, the MPC unanimously agreed on the 2 percentage point reduction, which translates to a 200 basis point cut, aiming to improve credit access and unlock growth across key sectors.

“The MPC revised key policy instruments and unanimously agreed to reduce the central bank rate from 15 percent to 13 percent to spur and stimulate credit to the private sector and support robust economic growth,” the statement said.

In addition to lowering the interest rate, the central bank also adjusted the Reserve Requirement Ratio (RRR)—a policy that determines how much commercial banks must hold in reserve. While the ratio for South Sudanese Pound (SSP) deposits remains unchanged at 20 percent, the reserve ratio for foreign currency deposits, including U.S. dollars, euros, and British pounds, has been raised from 20 percent to 25 percent.

“The MPC maintained the Reserve Requirement Ratio for SSP at 20 percent of total deposits and raised the RRR for foreign currency from 20 percent to 25 percent of total deposits with immediate effect,” the central bank noted.

The changes come at a time when South Sudan’s financial sector is under pressure from widespread cash shortages. Last year, the central bank lifted the SSP 10 million (approximately $6,250 USD) withdrawal limit for individual accounts, a policy that had been in place during a peak in the liquidity crisis.

The lifting of the withdrawal cap was intended to encourage depositors to keep savings in the formal banking system by enabling easier access to funds. At the time, former Central Bank Governor Johny Ohisa Damian said the move was also aimed at encouraging commercial banks to offer interest on savings accounts, thereby improving financial inclusion.

With inflationary pressures and currency instability continuing to affect daily life across South Sudan, the central bank’s latest steps are seen as an attempt to steer the economy toward greater stability and trust in the banking system.

“The Bank of South Sudan remains committed to supporting the economy during these tough times,” the statement added. “We are confident the banking sector will navigate successfully through fears and uncertainty.”

The government and financial regulators are hoping that by stimulating credit to businesses and increasing the availability of cash, both local enterprises and consumers will benefit from greater access to finance.

However, economists caution that these measures must be accompanied by broader structural reforms, including anti-corruption efforts and more efficient public spending, to truly stabilize South Sudan’s fragile economy.