Home | News    Monday 3 December 2012

Sudan currency falls to new lows as government sounds warning bell on spending

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December 2, 2012 (KHARTOUM) – The Sudanese pound marked a record low on Sunday in the black market dealing a fresh blow to government’s efforts to bring stability to the foreign exchange market which has yet to recover from the impact of South Sudan’s secession.

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FILE - A man counts notes after receiving the new Sudanese currency at a central bank branch in Khartoum July 24, 2011 (REUTERS/ Mohamed Nureldin Abdallah)

The development comes less than two weeks after the Bank of Sudan (BoS) announced that it has received a "large" deposit of hard currency from an unspecified source.

On Sunday, a dollar bought 6.5 pounds on the black market compared with 6.3 a week ago. This is the lowest rate since the Sudanese pound was introduced in 2007 and also well below the official rate of around 4.4.

Sudan has already took the long avoided step of devaluing the currency last July to bring official rate in parity with the black market.

Traders told Reuters that there is a shortage in dollars and said they expect the rate to reach 7 pounds to the dollar by year end.

A deal between Khartoum and Juba last September over oil transit fees renewed hopes that Sudan will soon get a stable supply of hard currency once oil production is resumed.

But recent hurdles that emerged as a result of Khartoum’s insistence that security arrangements are agreed on with Juba before oil can start flowing again, dashed hopes in the market that the dollar shortage will be resolved anytime soon.

South Sudan was scheduled to resume oil production on Nov. 15 with the first exports to hit markets by January.

In response to the worsening exchange rate situation the finance ministry said today that it expects to receive $1.5 billion in foreign currency before month end.

But similar announcements made by the government over the course of this year did little to quell the exchange crisis. Some observers in Sudan even went as far as questioning the truth of hard currency deposits the central bank says it is receiving.

A meeting of the leadership council at the ruling National Congress Party (NCP) today tackled this issue and affirmed the need to preserve the exchange rate.

The NCP deputy chairman Nafie Ali Nafie told reporters that stabilizing the exchange rate and balancing the budget is an economic priority for the government.

In a related issue the finance ministry renewed its call for lifting subsidies on petroleum products for the sake of helping the poor.

The Undersecretary of the finance ministry Youssef Abdullah Al-Hussein went on to say that the country’s national income falls short of maintaining the government’s functioning.

"There are ministries if we allocate the entire budget to it would not be sufficient," Al-Hussein said at the national assembly.

He also complained about government agencies not abiding by austerity rules implemented this year including the "parliament itself".

The official revealed that they sent a letter to the council of ministers barring the travel of any constitutional post holder and accused unnamed parties of circumventing this rule through travel agencies. The latter he said are flying officials "on credit" and bills would be settled later through public funds.

The finance minister Ali Mahmood speaking at the national assembly as well said that the 2013 budget faces a number of constraints such as natural disasters, political events, diseases and sanction. He announced that new buildings would no longer be authorized including ones planned at the defense ministry.

The east African nation was almost totally reliant on oil exports which provided the bulk of its national income and foreign currency inflows fueling an economic boom that followed the end of a two-decade long civil war.

After years of a robust economic growth including double-digit figures, Sudan witnessed an economic contraction in 2011 as a direct result of the country’s breakup.

Last April, the IMF projected a -7.3% GDP contraction in Sudan for 2012 but in October the world financial institution changed that number to -11.2%.

(ST)

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  • 3 December 2012 06:47, by Mi diit

    Khartoum’s currency will always continue to lose its value and experience free fall until they get hard currency through South Sudan’s oil. They need to allow for the flow of oil again instead of pretending that they are hurting South Sudan alone.

    repondre message

    • 3 December 2012 07:25, by George Bol

      Pound or Dinar?. During the war Sudan blindfold their clients that all solders deployed in the South are all alive. The dust just enter their eyes when 50,000 prisoners were relieved in YEI, BUMA, NARUS, DIMA, and CHUKUDUM. Go with ur DINAR ti suit your desire jallaba.

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    • 3 December 2012 07:31, by P.K.M

      Mi diit, Khartoum never had that power to not allow oil through their territory otherwise the pipeline would have never been shut-down by South Sudan President in the first place. So if you say what you just said; you’re giving them the power they have never dreamed of in their entire existence! If they have that power; the oil would be running right now to protect their currency.

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    • 3 December 2012 08:38, by Logic

      The pathetic retards (NCP) are continuing to destroy the country, even if S. Sudan wanted to disarm the rebels, this cannot happen!
      The currency is devaluating because you’ve lied to the people for far too long, now we’re reaping what you sawed.

      repondre message

      • 3 December 2012 12:51, by Mi diit

        P.K.M,
        It seems you don’t understand how the oil pipeline operates. We control its base in South Sudan but the Jalaba controls its end in Port Sudan. We have power only to close it but the Jalaba has the power to let the oil flow to Port Sudan. Otherwise they can simply confiscate it like they did in the past. Do you understand it NOW!!!

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        • 3 December 2012 13:56, by P.K.M

          Mi diit, it appears that the terms comprehension is on the beholder’s eyes! Do you know Sudan had been kicking and screaming after we shut-down the pipeline in order to have the oil running again? If South Sudan power over oil transit had never suppersucceed Sudan power; oil would be running by now in Sudan. Remember; it’s easier to pay too much attention to the noise other than signal.

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  • 3 December 2012 07:53, by Jalaby

    No worries guys, our currency will soon grasp a great momentum as soon as "our oil" starts to move from the south to Port Sudan because Pagan Amom in Khartoum now begging our government to open the pipeline and agreed to comply to our all demands and dismembering division 9 & 10th and kick SPLA-N asses out of the south!
    The south big butt is heating up badly now!

    repondre message

    • 3 December 2012 08:04, by P.K.M

      Jalaby, really! South Sudan is going to do that for you? Are you sure about it? When is that going to happened that South Sudan is to care of your rebel to kick them out? I guess is, we can’t wait to see that happened!

      repondre message

      • 3 December 2012 08:57, by Northern Sudanese

        P.K.M
        we don’t do it against your will, stop acting as if your superior because your nothing but low lifes . if the pipes are remained closed the south will remain in chaos.

        repondre message

        • 3 December 2012 10:00, by P.K.M

          Northern Sudanese, who are the low-life people between the two countries? The one who need the oil to pass through their country to get paid for oil transit fees to survive or the people that actually own the oil? Pick one and the reason for your answer. The low-lifers are:
          (A) Sudanese that need fees
          (B) South Sudanese that owned the oil
          Don’t pick the wrong answer you’ll look like an idiot.

          repondre message

        • 3 December 2012 11:33, by South South

          Northern Sudanese,
          US dollar reaches 6.3 SP. Sudan is like leanlng wall which will fall down soon.

          repondre message

        • 3 December 2012 16:43, by zulu

          North Sudanese
          If you are mighty as you claim, why dont you try divisions 9 and 10, let alone other divisions within south sudan? dont be like hamas who lost heavily but claim victory because of the cease fire negotiated by the americans. we know AU and UN are the onse protecting you folks, be we did teach you a very good lesson.

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    • 3 December 2012 10:11, by Observer

      Jalaby,
      You poor blind fool- still clutching to straws rather that facing the reality that we all have to.
      Unfortunately for us, S Sudan is in the key seat not us - something our politicians have just realised but obviously not you and N Sudanese as you cling to the lies being fed to you by your masters

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      • 3 December 2012 10:39, by Jalaby

        "S Sudan is in the key seat not us"
        Observer,
        Go and learn ABC in politics and history first before making any comment, you’re not just a naive person who opposes for the sake of opposition itself but completely ignorant!

        repondre message

        • 3 December 2012 11:19, by Observer

          Jalaby,
          Oh really??
          I think I am in a better position than you to comment on this- and completely opposite to what you call me- I am not at all ignorant of this matter.
          Funny how you ad N Sudanese always stoop to personal attacks when someone questions your statements. or if it isnt a personal attack it is accusations of not being Sudanese or being a traitor, or whatever you want to make up.

          repondre message

          • 3 December 2012 11:54, by Force 1

            Jalaby telling people to go and learn ABC in politics and history is like a blind directing people who are actually with eyes where to go. The first school Jalaby need to go to is the school of truth and facts. We know the only school he went to is the school of “straw-man argument” that has nothing to do with either facts or truth!

            repondre message

  • 3 December 2012 08:29, by mohamed mahgoub

    My stupid felow sudanese countrymen! Why u always assuming that the resumtion of the SS oil will relieve our failing economy with these little fees, the problem wasn’t orginated from the lost of %75 of the transit fees its of the whole oil revenue! so the NCP keep spreading lies & u keep swiming with the same current,not to mention wars in the new south& west beside overwhelming corruption

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  • 3 December 2012 08:55, by Tutbol

    I think; SUDANTRIBUNE; for a fair & a balance journalism, has an obligation to give a SOURCE of its reports, i know it is a non-profit news that is trying to help both peoples of the Sudan get the true democracy as it was brought to the whole world by French people over 200 years ago. We just need to be true to the democratic ideals other than to be zig-zagged on the lanes, we have already crossed

    repondre message

  • 3 December 2012 09:42, by kikokaka564

    This situation is beginning to be alarming, it must react..
    Friends website

    repondre message

  • 3 December 2012 15:15, by master

    S sudanese
    ordeals
    ordeals
    ordeals
    ordealsssssssssssss

    repondre message

  • 3 December 2012 15:21, by master

    Janobean
    let us wait & see who will break down first
    we will bite u in your butt

    repondre message

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