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March 12, 2013 (KHARTOUM) – The US dollar inched lower in the Sudanese black market in what appeared to be an immediate reaction to the agreement signed on Tuesday between Khartoum and Juba to resume oil exports.
- The value of the Sudanese pound strengthened following the agreement between the two Sudans (Getty)
South Sudan is to pay its northern neighbour to route its crude oil through northern pipelines, ending a row that led to the shutdown of the entire southern output of 350,000 barrels a day.
The loss of oil revenue severely curtailed Sudan’s foreign currency inflows, putting pressure on the Sudanese pound and pushing inflation rates even higher.
Furthermore, Sudan’s low levels of foreign currency reserves held by the central bank also meant the latter could do little to intervene to support the pound against other currencies.
On Tuesday, currency traders told Sudan Tribune that the dollar is now selling for 6.9 pounds compared to more than 7 pounds previously.
However, they said that the market ran out of Euros after it surpassed 9.0 pounds.
In a related issue, the Sudanese finance ministry’s under-secretary, Abdel-Rahman Dirar, said that the oil agreement will bring balance to the economies of the two countries by providing much-needed hard currency so that the pound can regain its footing, thus bringing prices down.
(ST)
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