The government and financial institutions have to regulate money circulating outside the bank institutions, an economist has said.
In research conducted by the Directorate of Banking Supervision Research and Statistics of the Central Bank, about 88% of the money in the country circulates outside the banking system.
Dr. Addis Ababa Othow Akongdit, managing director of Equity Bank in South Sudan, said changing the currency with a new note could bring back the money outside to the banking system.
Dr. Othow stated that this could allow bring back the money already being stored in houses, and others that circulating outside the bank sector.
“One of the positive impacts is that it will allow the money outside the banking system into the banking system,” he told Eye Radio on Monday .
He affirms that a recent survey indicates about 88% of the money in the country circulates outside the banking system.
“The recent survey that was conducted by the Directorate of Banking Supervision Research and Statistics of the central bank, thus says clearly that almost about 88% of the money in the country circulates outside the banking system,” he continued.
However, he believes that changing the currency could come with several economic implications.
“It is the responsibility of a regulator in conjunction and collaboration with the banking sector to ensure that 88% of the money outside the banking system comes into is through the currency change but it has implications,” the economist added.