December 15, 2015 / 8:30 AM / 4 years ago

UPDATE 1-South Sudan shifts to floating exchange rate -minister

* South Sudan’s currency battered by conflict

* Oil output tumbled, crude prices have fallen

* Most South Sudanese subsistence farmers, herders (Adds details of shift to floating rate)

By Denis Dumo

JUBA, Dec 15 (Reuters) - South Sudan abandoned its official fixed exchange rate and moved to a floating rate on Tuesday, Finance Minister David Deng Athorbei said.

The central bank had held onto a fixed official rate of 2.95 South Sudanese pounds per dollar even as the currency fell steadily in value on the unofficial market after conflict erupted in the world’s newest nation in December 2013.

“The current fixed exchange rate of South Sudan Pound against U.S. dollar will be abandoned,” Deng Athorbei said on state television late on Monday.

As of midnight Monday-Tuesday, he said the level of the pound “will be based on market forces.”

The South Sudanese pound was quoted by dealers in the open market at 16 to the dollar on Tuesday.

Traders and ordinary South Sudanese have struggled to secure dollars to pay for even basic imports or other essential items as the conflict has cut oil production and global crude prices have slid.

The minister also said efforts would be made to help the most disadvantaged by raising salaries where necessary.

Most of South Sudan’s 11 million people are subsistence farmers or herders without regular incomes.

Oil had been the biggest source of income for South Sudan, which gained independence from Sudan in 2011. Production now stands at about 165,000 barrels per day, having fallen from around 245,000 barrels per day before conflict erupted.

Reporting by Denis Dumo; Writing by Edmund Blair; Editing by Edith Honan and Catherine Evans

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