November 19, 2012 (KHARTOUM) – The Central Bank of Sudan (CBoS) announced on Monday that it received "large deposits" in its foreign accounts that would bolster its foreign exchange reserves to meet food import needs and achieve Forex stability.
- A Sudanese man shows freshly-minted notes of the new Sudanese pound in Khartoum on July 24, 2011 (Getty)
"We will utilize this cash primarily to stabilize the exchange rate in the light of expectations for greater flows of foreign exchange during the upcoming period" says the CBoS press release.
The development comes as the Sudanese pound fell sharply against the dollar last week amid reports that resumption of South Sudan’s oil exports will be delayed further. As per the agreement sealed with Juba last September, Khartoum will collect a fee for each barrel of oil exported by South Sudan through the north’s pipeline.
The fee will plug part of Sudan’s budget hole that resulted from South Sudan’s secession which contained 75% of known oil reserves. It would also provide a source of hard currency desperately needed by Khartoum to shore up its Forex reserves.
The US dollar traded on Sudan’s black market for 6.3 pounds on Sunday, compared with 5.5 after Juba-Khartoum oil deal two months ago.
The central bank did not say where it got the amount or the source of the fresh cash infusion from but it is likely to have been provided by other countries.
This is not the first time the government made such announcements on external Forex help which allowed for temporary reprieve for the Sudanese pound on the black market.
Some observers accuse the government of deliberately feeding false news on Forex receipts in a bid to scare the black market into selling its Forex holdings to ease pressure on the local currency.
Last May a senior CBoS official told Sudan Tribune that he had no knowledge of a government disclosure that a cash transfer was made to Khartoum by a neighboring country.
So far only Qatar has made a public pledge to assist Sudan by providing Forex deposits with CBoS. It is believed that Khartoum also reached out to Saudi Arabia, Algeria, Libya and Iraq for help but has met little success.
A year ago, the CBoS governor called on Arab states to provide up to $4 billion in deposits to boost its Forex reserves.