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Sudan devalues currency by 22.6%: report

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November 11, 2013 (KHARTOUM) - The Central Bank of Sudan (CBoS) has quietly devalued its currency by 22.6% against the US dollar which is the second move of its kind since more than a year ago.

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A Sudanese man shows freshly-minted notes of the new Sudanese pound in Khartoum on July 24, 2011 (Getty)

Bidding prices for the pound were stated as 5.6871 for one dollar, compared with 4.4 previously, central bank data on Reuters terminals showed on Monday. Ask prices were 5.7155. In 2011, the official rate was around 3.

A CBoS official, asking not to be named, told Reuters the rate had been already changed in September when the government cut fuel subsides. He did not elaborate.

The official may be referring to the move by the Sudanese cabinet that month to raise the US dollar exchange rate for importing purposes to 5.7 pounds along with its decision to scale back fuel subsidies which almost doubled prices of gasoline and diesel.

In May of last year, CBoS allowed government-licensed Forex bureaus to determine their own rates in buying and selling currencies but within a certain range in an effort to curb the flourishing black market.

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.

Prior to the country’s breakup, Sudan produced close to 500,000 barrels but now its output is limited to 140,000 barrels per day. Oil revenue constituted more than half of the Sudan’s revenue and 90% of its exports.

The Sudanese pound lost more than half its value against the US dollar in the black market and at one point reached 8.2 in last September compared to an official rate of 4.4.

The CBoS refuses to disclose the amount of Forex reserves it holds but a report released by the International Monetary Fund (IMF) this month shows it having $1.6 billion in 2013 which covers only 2 months of imports compared to $1.7 billion in 2012.

An IMF online survey published in 2011 argues that that a country must hold Forex reserves that cover 3 months of imports at a minimum.

The low level of reserves means that the government has little leverage to intervene in the market to bring down the exchange rate and cut demand in the black market.

Today’s devaluation also means that Sudan will pay more to import food which is vital to plug the deficiency in local food production. It also hurt businessmen and foreign companies that desperately seek to repatriate profits abroad.

This week, Zain, Kuwait’s No. 1 telecom operator, said that its Sudan unit saw a plunge in profit for the third quarter which it blamed on foreign exchange fluctuation.

(ST)

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  • 12 November 2013 08:09, by Agutthon

    South Sudan that mimics Khartoum must now devalue currency in that regard.

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    • 12 November 2013 08:28, by South South

      Fake Arabs of Sudan are sinking everyday in everything. Million of them are on the way coming back from Saudi as they are not wanted there, beggar. Not only devalued your trash pound, but wait for the downfall of the entire country soon. South Sudan should be laughing when they see fake, stupid black Arabs are struggling everyday.

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      • 12 November 2013 08:46, by Jalaby

        South South,
        You guys are always think with half close-minded!!
        Make no mistake if the north (Sudan) economy collapses then the south economy will follow and will immediately collapse and remember how the south was about to die of hunger when Sudan blocked the pipeline, Sudan is considered to be the oxygen for the south YA BALEED ENTA!!

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        • 12 November 2013 09:09, by South South

          Jalaby,
          Let me waste my time to say something about what you mentioned above. There is no link or association between South Sudan and North Sudan in everything, let alone economy. South Sudan economy right now is linked with Uganda and Kenya. Go to Juba market, go to Wau market, go to Rumbek market, go to Aweil and go everywhere in South Sudan, you will not miss seeing goods from Uganda and Keny

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          • 12 November 2013 09:58, by Jalaby

            To South South,
            "There is no link or association between South Sudan and North Sudan in everything, let alone economy"
            Really!! I didn’t know that! never mind I know you’re just BALEED JIDAN JIDAN!!

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    • 12 November 2013 08:30, by Jalaby

      To Agutthon,
      Nothing wrong with that if S Sudan is mimicking Sudan because if the economy is so associated between two countries then any decision by any one of them will impact immediately on the other country and a quick measurement needs to be put in place by the other country otherwise it will have a serious consequences on its economy

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      • 12 November 2013 08:39, by Jalaby

        let us take US & Canada as an example for two countries that their economy is so associated and linked to each other,if for instance the central bank in US (FED) increases the interest rate in US then Canada Central Bank (Bank of Canada) will increase interest rate in Canada the next day if not the same day!
        Yes,S Sudan will always be following its older brother Sudan steps!!

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  • 12 November 2013 08:59, by Jalaby

    To Khartoum government,
    Increasing production is the only way out, Sudan is an agricultural country and remember when Sudan got its independence from UK in 1956, Sudan had a surplus on its budget,the revenue from exporting the cotton & sesame only (without livestock,corn,Gum Arabic,etc) were quite sufficient to fill our treasure with foreign currencies

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    • 12 November 2013 09:05, by Jalaby

      and Sudan was one of the richest country in Arab and Africa!
      Increasing production in agriculture,livestock,industries and oil production will be the only way out and we have to concentrate on agriculture because that’s our real oil which will never last,we need to resolve Al-Jazeera project problems first and bring it back to its strength and make it our real "oil" production

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      • 12 November 2013 09:11, by Jalaby

        After heightening Rosowris dam, we need to speed up the process in implementing Kenana & Al-Rahd channels because that will add around 2 millions acres ready for agriculture and also speed up the process in building Atbara & Setait dams and all the agricultural projects which are associated to them (by 2017 the land will be ready for agriculture I believe)

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        • 12 November 2013 09:15, by Jalaby

          and before all that, we need to stop the war in some areas in Sudan and bring harmony among Sudanese because development can’t be done under war, a democratic free Sudan is the real solution and that will establish stable and strong Sudan no doubt!

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          • 12 November 2013 09:36, by Logic

            Dirty Jalabia, if you speak with such logic... why do you sound like a retarded bigot most of the time who’s only interest is to insult S.Sudan. For now, advise your pussycat uncles in SAF to stop brutalizing their own citizens, once peace is achieved, the rest becomes much easier.

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            • 12 November 2013 14:14, by zulu

              The Sudanese economy heavily relies on South Sudan for trade. Its demise is obvious further because as s. sudan is increasingly relying for goods and services from east africa, goods entering s. sudan from north have no value and will loose trade as we start to move away from dependency on jalaba goods. the dollar will hit 22 pounds soon in sudan while the south is at 3.5 to a dollar

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      • 12 November 2013 21:41, by Eyez

        Jalaby!
        You must be really stuck on stupid, because, whatever you say is not going to change the fact that, Sudan’s economy is totaly going off the rails and its evident in the devalution of its pound. Sudan is doomed, ya’ll can revive the agriculture sector, or open the (supposedly) biggest goldmine in Africa, but we all know that Sudan is a sinking ship. Bellydance for us ya Jalaby and earn cash

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  • 12 November 2013 12:09, by BM Bol

    and juba will follow suit sooner. kiir is taking pages out of bashir’s playbook.

    repondre message

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