South Sudan 500 Pounds Banknote

The South Sudanese pound is the third worst performing currency after Sudan’s and Zimbabwe’s dollar in the latest ranking of African currencies against the US dollar.

In a report published by Business Insider Africa, the Zimbabwean dollar has rated the 1st worst-performing currency in Africa followed by the Sudanese pound with South Sudan’s being 3rd.

The report was based on research by a professor at Johns Hopkins University that investigated the value of African Currencies during the 1st quarter of the year.

Every week, Steve Hanke, a Professor of Applied Economics and Director of the Troubled Currencies Project in the United States, publishes Hanke’s currency watchlist – a group of currencies that have depreciated by at least 20% against the dollar since January 2020.

In his latest list, he found out that the Zimbabwean dollar has depreciated against the US Dollar by 97.33% since Jan. 2020, whereby he suggested that “Zimbabwe dump the Zim dollar and adopt the USD immediately.

The Sudanese pound which comes second has depreciated against the USD by 84.95% since Jan 2020.

He suggested that Sudan’s pound & its economy install a currency board to address the challenge.

Meanwhile, South Sudanese pounds have depreciated against the USD by 50.79% since Jan 2020-something Hanke said, the country is experiencing an economic death spiral that never ends.

According to the ranking; Nigeria, Ghana Malawi, and Sierra Leon currencies came 4th, 5th, and 6th, respectively, experiencing depreciating rates at 42.57%, 39.54%, and 31.23% correspondingly.

In summary, Hanke state that the depreciation in “exchange rates in ten African countries will have a substantial influence on companies’ operations and profitability.

He added that the exchange rate volatility will affect not just multinationals and large corporations, but also affects small and medium-sized enterprises, including those who only operate in their home country.

Hanke advised that, while understanding and managing exchange rate risk is a subject of obvious importance to business owners, investors should also be familiar with it because of the huge impact it can have on their holdings. –