One U.S. dollar currently trades at around 3,000 South Sudanese pound in the Forex market. | Photo: Courtesy.

An economist pointed out that reliance on single commodity exports like oil and foreign traders exporting dollars are key factors contributing to the ongoing depreciation of the South Sudan pound against the US dollar.

As of Friday, July 19, 2024, a dollar sells at over 4000 pounds in the parallel market compared to the official rate of 1, 590.

According to Ahmed Morgan, a renowned South Sudanese economist, a country’s economy is backed up by exports.

However, the country has relied 98 per cent on oil without other alternative products for export and is importing everything from outside, citing the major cause of the economic downturn.

Besides, he said, foreign investors are repatriating much of the country’s hard currency, creating the pressure on South Sudan pounds.

The economist warned that the South Sudan pound will continue to weaken if the government does not begin diversifying the economy.

“Economically, as I speak, we know that our currency is backed by exports. When a country exports consistently, its currency remains strong,” Morgan explained in an exclusive interview with Eye Radio on Friday.

“In our case of South Sudan, it’s worst because we have been talking for a long time, we always depend on only one export that is oil.

“Almost 98% of other crops, or other products cannot benefit as we know that everything that we use is imported from outside and the demand for hard currency is more than the supply that we have,” he said.

“The second point is you have the issue of 99% foreign business, who always repatriate their profit from our country in terms of hard currency, They cannot take our pound, so this will continue to be destabilized until when the economy gets to diversification.”

With the oil flow interrupted due to the Sudan Conflict, the major source of the country’s revenue has been curtailed.