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U.S. dollar skyrockets as Sudan adopts new mechanism to set exchange rate

An employee of a money changer holds a stack of U.S. Dollar notes before giving it to a customer in Jakarta, October 8, 2015. (Reuters Photo)
October 7, 2018 (KHARTOUM) - The exchange rate of the U.S. dollar on Sunday went up to 51,0 Sudanese pound (SDG) on the black market as the government introduced the new body to set the daily exchange rate.

Governor of the Central Bank of Sudan (CBoS), Mohamed Kheir El-Zubeir, on Thursday said the government decided to form a body of bankers and exchange bureaus to set exchange rate on daily basis.

The move was part of a package of financial and monetary measures designed to tackle the deepening economic crisis in the east African nation.

The government body on Sunday set the purchase price of the U.S. dollar at 47,5 Sudanese pounds while the selling price was put at 47,7 pounds.

The new price of the dollar set by the body of bankers and exchange bureaus reflects 60% devaluation in the value of the Sudanese pound as the previous official dollar exchange rate was 28.0 pounds.

However, traders in downtown Khartoum told Sudan Tribune that the purchase of the U.S. dollar on the black market ranged from 50 to 51 pounds, saying most trades refrained from selling the dollar.

A trader, who spoke to Sudan Tribune on the condition of anonymity, expected the dollar price to continue to rise during the next period, pointing to lack of liquidity in the banks.

Economic conditions in Sudan have been challenging since the secession of South Sudan in 2011 and the loss of the bulk of oil production and exports.

The withdrawal of South Sudan oil has compounded the difficult external environment, including debt arrears, limited access to external financing, U.S. sanctions, and the withdrawal of correspondent bank relations.

The most recent International Monetary Fund (IMF) report indicated that Sudan’s gross international reserves remained very low in 2017 ($1.1 billion, 1¾ months of imports).

(ST)