South Sudan is cracking the whip on the manipulation of the Central Bank's foreign exchange (FX) electronic money (e-money) system.
The Bank of South Sudan (BoSS) has threatened severe sanctions on perpetrators, including cancellation of their operating licences and expulsion of their executives.
Majouk Kuol Mading, director general, Directorate of Supervision and Financial Stability at BoSS, said the apex bank had observed with serious concern that certain commercial banks and non-banking financial institutions were conducting forex transactions through e-Money (or book value transactions) at rates higher than those applied for FX cash-based transactions.
"This practice is unacceptable, distortionary and contrary to regulatory requirements as it undermines financial stability, erodes market confidence and threatens the integrity of the monetary system," Mading said.
"All banks are hereby reminded that strict parity must be maintained between FX e-money (book value) transactions and FX cash transactions and in full compliance with the directives of the BoSS.”
The Central Bank added that any violation of this directive would result in severe administrative and financial penalties, including monetary fines and penalties, suspension or removal of executives, suspension or revocation of banking licenses.
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