Kenya’s central bank said on Monday that commercial banks operating in South Sudan may be affected by possible United Nations sanctions.
“Sanctions to South Sudan could expose Kenyan banks to risks,” the Bank said in a report on its website.Policy makers should pay attention to any additional “punitive litigationsâ€� against financial institutions, regulators, companies and countries for violating sanctions or breaches of contract, it said.
The U.N. Security Council has warned it is ready to consider “appropriate measures” against warring parties in South Sudan if they do not stop the violence and negotiate a transitional government.
South Sudan has been in political turmoil since President Salva Kiir sacked his deputy Riek Machar last year, triggering a conflict that reopened deep ethnic tensions in the world’s youngest country, which only won independence from Sudan in 2011.
Kiir comes from the dominant Dinka ethnic group, while Machar, now a rebel leader, is from another major tribe, the Nuer.