Sudan’s pound rises following CBoS announcement on receiving new Forex deposits: report

November 25, 2012 (KHARTOUM) – The Sudanese pound improved significantly against the US dollar in the black market in reaction to the Central Bank of Sudan (CBoS) announcement this week that it received fresh hard currency deposits from abroad.

The pro-government al-Rayaam newspaper said that the Sudanese pound is now at 5.3 to the dollar, compared to 6.3 last week.

CBoS has said that the new Forex infusion received will be used to “stabilize the exchange rate in the light of expectations for greater flows of foreign exchange during the upcoming period”.

The government has struggled to stop the drop in the pound’s exchange rate to the dollar mainly since the oil-rich South Sudan seceded and resorted to a number of measures over the last two years to reverse the trend.

Among the measures taken was limiting the list of goods that can be imported and restricting purchases of hard currency by travelers.

Last May however the government allowed the long-avoided move of devaluing the currency which meant that Forex bureaus and banks can trade dollars at a level close to the black market rate.

But a Forex bureau owner told al-Rayaam newspaper that the black market remains dominant given the competitive pricing it offers.

The government is hoping that its growing gold exports will provide a new source of Forex for its economy though some analysts express skepticism that this can occur in the short term.

Last September Sudan and landlocked South Sudan signed a deal stating the fee Juba has to pay to route its crude through northern pipelines ending a row that led to the shutdown of the entire southern output of 350,000 barrels a day in January.

The agreement raised hopes in Sudan that the hard currency situation will improve as a result of the transit fee receipts. However officials in Khartoum recently stressed that oil transportation will not resume without resolving security issues.

(ST)