Sudan’s central bank to inject more hard currency into market

September 4, 2013 (KHARTOUM) – The Central Bank of Sudan announced on Wednesday that it intends to inject more hard currency into the market so that banks can use it to meet their needs.

The highest monetary authority also released new amendments to Forex rules by which banks can now use any payment method to process import operations for high-priority commodities such as wheat, medicine, medical equipments, agricultural and industrial machinery and imports for investment purposes.

Under the new rules, the bank will allow foreign workers to transfer money abroad once a month, but only after presenting proof of legal residency and verifying their workplace. .

In statements to the press, the assistant central bank governor, Azhari al-Tayib, also said that banks can now import non-basic items through pre-payment and other previously used methods.

The pro-government Sudanese Media Centre (SMC) website quoted a source at the finance ministry as saying that the central bank is working on improving the exchange rate of the pound relative to the US dollar by reducing liquidity in the market to curb inflation.

The source noted that Forex infusion and economising its use especially after the receipt of oil transit fees from Juba will bring about a gradual reduction of exchange rates and thus increase production and supply and in turn limit the rise in commodity prices.

Last month, Sudan received a total of $236 million in transit fees, including $150 million from South Sudan and $86 million from oil companies.

Khartoum is under pressure to preserve the eroding value of its currency in the wake of the secession of the oil-rich South Sudan in July 2011.

Oil was not only the main source for state revenues but also for dollars needed to fund imports.

Economists say because banks and Forex bureaus are unable to supply enough dollars, the black market rate is seen as the benchmark for the real market value of the pound.

Last March, Sudanese authorities started rounding up currency traders after the central bank announced that it will prosecute anyone dealing in the black market.

(ST)