Sudan central bank says bottleneck over hard currency eases

April 4, 2011 (KHARTOUM) — The Central Bank of Sudan (CBoS) revealed today that the country’s supply of hard currency has increased as of late reversing long-standing shortage that has had a harsh impact on ordinary citizens and businesses alike.

In an emailed statement, CBoS said that indicators point towards an “abundance” in foreign currency in banks and Forex bureaus saying that this shows that the market has enough supply to meet demand.

The highest financial authority further said that there is a drop in demand by banks for hard currency and pointed out that it has provided sufficient injections recently driven by a boost in proceeds from gold exports.

Sudan has witnessed increased interest in gold exploration by individuals and companies which the government hope to compensate for the projected loss in oil revenue with the South’s secession next July.

CBoS has recently increased the cap on hard currency that can be carried by travelers abroad and allowed withdrawals from special accounts.

Over the last year the Sudanese pound has dropped dramatically versus the dollar and black market flourished as a result while banks and Forex bureaus have been unable to meet demand.

Last year, the authorities introduced the premium concept to encourage holders of forex to come forward and sell their holdings at a generous rate close to that of the black market. The margin was initially set at 16.29% above the official price.

Sudan’s limited foreign exchange reserve has curtailed its ability to control the price of the local currency. However officials at CBoS refuse to divulge how much it has in holdings of foreign currency but according to CIA Factbook is estimated to be at $2.06 billion by end of 2010.

(ST)