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No end in sight to Sudan’s currency woes

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December 12, 2012 (KHARTOUM) – The Sudanese pound continued sliding further against the U.S. dollar as traders in the black market saw no signs that the persistent shortage in foreign currency will ease anytime soon.

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FILE - A Sudanese man shows off the new currency in front of Central Bank of Sudan, in the capital Khartoum on August 27, 2011, several weeks after Sudan launched the new Sudanese pound (ASHRAF SHAZLY/AFP/Getty Images)

A deal signed between Sudan and South Sudan last September that would give Khartoum a cut of every oil barrel exported through the north’ s pipelines, is now facing hurdles over security prerequisites that the Sudanese government insists must be concluded first.

South Sudan was scheduled to resume oil production on Nov. 15 with the first exports to hit markets by January. It was hoped that the restart would provide Sudan with a stable source of hard currency it desperately needs since oil-rich South Sudan seceded last year taking with it 75% of the country’s 450,000-barrel-per-day output.

Sudanese authorities were faced with the dilemma of providing hard currency needed for paying food imports or supporting the local currency against other currencies in a flourishing black market.

The new Sudanese pound rolled out in July of last year was initially set at an official exchange rate of 2.7 to the dollar before the government devalued it to 4.4.

Today the dollar reached 6.8 pounds in the black market compared with 6.5 earlier this month. Other currencies such as the widely traded Saudi Riyal also traded higher against the pound.

The Central Bank now appears virtually helpless in containing the deteriorating exchange rate given its low level of foreign exchange reserves it holds.

Sudan has been seeking cash infusions from Arab countries but was met with little success. A series of announcements made this year including one last November by the central bank that it has received "large" Forex deposits from abroad have done little to impact the exchange rate.

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.

(ST)

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  • 13 December 2012 07:16, by South Dengjok

    Dear Me,
    u will nebba nebba stop crying until u implement the Addis ababa Talk for exporting oil according 2 agreed charge,Useless Arab that nebba think a head for a problem,know only the spying,u will be destroy politically and globally until u regret from Africa cuze u r from Asia and we know that u are all terrorists supporter in the world and Africa ,but u will smell it and dollar will fuck u

    repondre message

  • 13 December 2012 07:49, by Jalaby

    To Sudantribune,
    You proved to me that I’m 100% correct about what I just said that tribune is so fast in posting negative news about Sudan and blocking negative news about south Sudan!
    Simple question,why you omitted this news about south Sudan jumping inflation from your english version?!

    repondre message

  • 13 December 2012 10:14, by South Dengjok

    Dear Jalaba
    we are nat defending our negative parts but we ain,t got no negative that we will nat be able 2 solve cuze we r nat blink got no plan and frame work work on the challenges dat facing us,we r nat like u peple who just want to depend on other like parasite,if there was no S.Sudan and her resources ,where could u benefit from? useless!,how long r u gonna depend & continuous looting ours.

    repondre message

  • 13 December 2012 11:31, by Kenyang

    They can lie to their teeth but those prosperous days are long gone with South Sudan oil. North Sudan has nothing beneficial to offer to South Sudan. All needed for young gov’t in Juba is to produce an alternative routine for its oil thru East Africa....

    repondre message

  • 13 December 2012 16:15, by panchol

    jalaby.
    please try to pay a visit to South Sudan or give a phone call to your inlaw or cousins they will tell you the rate exchange in hard currency.1$=3.9SSP the same as when we were one. sometimes goes down to 2.8SSP against 1dollar.

    repondre message

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