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Sudanese currency flirting with record low against US dollar

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June 21, 2014 (KHARTOUM) – The Sudanese pound (SDG) appeared to be on the verge of hitting a new low milestone against the United States dollar (USD) which is likely to further aggravate the country’s economic woes.

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FILE - Men wait to buy meat at the market in Khartoum, Sudan (REUTERS/Mohamed Nureldin Abdallah)

Currency dealers on the black market said that 1 USD is now trading for 9.6 SDG, up from 9.4 last week. Sudan’s Central Bank indicative exchange rate for the USD stood at approximately 5.7 SDG.

According to traders, the USD being in extremely short supply relative to the high demand pushed the SDG further down.

Individuals and businesses alike monitor the informal market’s exchange rate to gauge the state of the economy and make plans accordingly.

Despite government pledges to inject more Forex into the market and crack down on the black market, the SDG continued to drop as banks and Forex bureaus have been unable to meet the demand.

The central bank also does not allow foreign firms in Sudan to repatriate its profits abroad to prevent Forex bleeding.

Sudanese officials have periodically made announcements of Forex infusions from Arab countries to pacify the market. The latest was last April when the government said that Qatar deposited $1 billion in its central bank.

The central bank refuses to disclose the amount of Forex reserves it holds but a report released by the International Monetary Fund (IMF) last year shows it to be holding $1.6 billion in 2013 which covers only two months of imports compared to $1.7 billion in 2012.

Sudan has been struggling to narrow the gap between the official and black market rates of foreign currency exchange which has been widening since the country lost its main source of hard currency revenues due to the secession of the oil-rich south in July 2011.

Because Sudan does not produce enough food to feed its population, it uses a significant portion of its Forex for food imports. As a result, the prices of commodities kept rising with every drop in local currency.

The government quietly devalued its currency last September bringing it down from 4.4 pound to 5.7 for one US dollar.

But last month, the IMF urged Sudan to allow more exchange rate flexibility.

“Against this background, the mission noted, however, the widening gap between the official and parallel market exchange rates. This gap is the result of a range of factors, including uncertainty about the revenues from oil transit as the conflict in South Sudan continues, domestic political uncertainty in the run-up to next year’s presidential elections, and imbalances in the foreign exchange market," the IMF said in a statement at the conclusion of a visit by its mission to Khartoum during April 29-May 8, 2014 to conduct the first review under Sudan’s 2014 Staff-Monitored Program (SMP).

In a related issue, a Sudanese official denied that the economy is in an economic crisis and instead described it as a “problem”.

The state minister of finance Abdel-Rahman Dirar told economic sector ministers in Gezira state that basic services are available, civil service is stable and ability to fulfill urgent needs remain intact despite rising prices and deteriorating exchange rate.

Dirar also warned that the federal government will no longer fill the states’ budget holes and will only pay each state’s share in the national income.

(ST)

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  • 22 June 09:16, by Jalaby

    Well, having economics difficulties are much much better than having the south united with north while the war is flaring .. the south was dragging the north deep into the bottom of the ocean since 1955 and was never a positive add but always takes and doesn’t give!

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    • 22 June 09:22, by Jalaby

      Thanks for Junbean for voting 98% not to be part of Sudan otherwise we will end up paying high price for the nonsense war in the south between the "stupids" guys the same way like before when these guys collapsed Addis Ababa agreement because of their tribal conflict and we paid the high price in the north!
      Unfortunately,the south problem has no solution

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      • 22 June 09:29, by Jalaby

        the war might calm down at sometime but will soon heat up again as long as the root cause of the problem remains with no solution!
        We know the reason behind our currency reduction, as long as the balance between exportation and importation is unequal then we have a problem!
        Let the south go with its oil because we don’t want oil that mixed with blood!!

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        • 22 June 11:24, by Rommel

          Jalaby:

          Do you realise just how incredibly childish you appear blaming all your woes on another country!? Your distorted rendering of Sudan’s history is not supported by the historical facts. There’s not a single *historian* that asserts that ’Southerners’ caused the failure of the Addis Ababa Agreement. You contravened every term of that agreement and yet you want to blame us?

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          • 22 June 11:39, by Rommel

            The North has been annexing fertile and mineral rich Southern territories for decades. The North annexed the Kafia Kingi enclave from Bahr el Ghazal and transferred it to Darfur in 1960. We have government gazettes to prove this. Historians have documented this. Even Google Earth shows the Kafia Kingi enclave within our borders.

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            • 22 June 11:47, by Rommel

              The Kafia Kingi enclave was part of Bahr al-Ghazal province when Sudan gained independence in 1956. In 1960 it was transferred to Darfur, which had become a province of Sudan in 1916. (The Kafia Kingi Enclave: People, Politics and History in the North-south Boundary Zone of Western Sudan – Edward Thomas)

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              • 22 June 14:21, by Jalaby

                Rommel,
                You Dinka people specifically who failed Addis Ababa agreement and your objection now to Equatorians request and the rebel of having federalism in the south is clear proof to that and history will repeat itself!
                What Kafia kingi? this is not our issue here but come on man how much revenue we made from Kafia Kingi in compared to what

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                • 22 June 14:26, by Jalaby

                  we spent in the south since 1955 and the war that almost damage our economy and left us leaving below the poverty line!
                  We really regretted it that we kept the south with us all this time and lost our people and money for nothing but useless land!
                  The south is just like CAR, CONGO,Burundi, RWANDA,ETC ..has no value at all and will always remain failed state!!

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                  • 22 June 14:43, by Rommel

                    Jalaby:

                    There’s not a single historian that agrees with you. Even Northern historians don’t agree with you. You seem determined to saturate our debates with fallacies. Ad nauseum fallacy -> repeating claims as if repetition were proof. Our conversations go nowhere because your fantasies are trapped and crushed by facts, that cause you attempt to repeat the same old lies.

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                    • 22 June 14:45, by Rommel

                      You are simply attempting to foster a lie, by repetition. The reason why this is a flaw in reasoning is that the validity or truth of an idea has absolutely nothing whatsoever to do with how often the idea is repeated. You can repeat something dozens of times and it will still be false, while a truth remains a truth even if it is stated only once.

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                      • 22 June 14:46, by Rommel

                        Historians have written quite extensively on the fact that Khartoum was responsible for the resumption of the war. Didn’t you recently state that you [the Arabs of Sudan] are the "real citizens of Sudan"!? You are in no position to condemn others for the vice that is chauvinism.

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                        • 22 June 14:47, by Rommel

                          Your chauvinism resulted in the deaths of a quarter to half a million people when your jihadist ’government’ so saliently took the side of Arab tribes when thy encroached upon and subsequently occupied Jebel Marra massif. Bashir recently said this: "We are an Arab, Muslim nation. Anyone who doesn’t like it can go."

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                          • 22 June 14:50, by Rommel

                            You didn’t condemn Bashir for that incredibly provocative statement, did you now? As far as I know, that idiot -Salva Kiir- hasn’t declared that South Sudan is a Dinka nation. Pray tell, does Sudan operate under the system of federalism!? Of course you don’t, and yet you want to posture and pontificate.

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                            • 22 June 14:53, by Rommel

                              You constantly like to call South Sudan a failed State, and a very strong case for that position can be made... But do you think calling South Sudan a failed State will mean that your country is somehow the opposite of this!? That at least a quarter of a million people didn’t die in Darfur!? That your ’government’ isn’t recognized as a State sponsor of terror?

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                              • 22 June 14:58, by Rommel

                                Do you think that Sudan isn’t considered a failed State as well!? Delude yourself as you must and as you will, but you are in no position to moralise to others. Sudan is a failed State. It has lost more lives to State sanctioned violence than any other country in the continent. Sudan follows Rwanda in the amount of people killed in tribal violence. Sudan is a failed State.

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                                • 22 June 14:59, by Rommel

                                  You need to ask yourself why it is you’ve had a rebellion of some sort in virtually every corner of your Nation —- in all the non-Arab peripheries; and why the rebellions always bemoan the hegemony, marginalization and persecution of a dictatorial and genocidal Arab elite. If South Sudan doesn’t meet the criteria to be considered a country, then neither does Sudan.

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                                  • 22 June 15:06, by Rommel

                                    You ’spent’ nothing in the South. Mention one project that you commissioned, payed for and completed to the attendant benefit of the South. The amount of money that you made from [our oil] is far in excess of what you supposedly invested in the South. Your country is still making money from the occupied lands of Renk...

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                                    • 22 June 16:07, by Rommel

                                      The border between Upper Nile State and White Nile has been pushed 90km southwards since independence in 1956. You really should start concerning yourself with your own affairs. We’re no longer one country — making your neurotic obsession with our affairs redundant, impertinent, deflective and incredibly disturbing. Seek the psychological help that you quite clearly so desperately need.

                                      repondre message

                  • 22 June 20:32, by Observer

                    Jalaby

                    It is better to keep your mouth shut and be thought to be an idiot as against opening it and confirming that you are an idiot.

                    repondre message

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