Sudan Central Bank to deal only in euros, advises to avoid dollar
December 28, 2007 (KHARTOUM) — The Central Bank of Sudan has announced it would deal only in the euro starting from Jan. 1, and advised local commercial banks to opt for convertible currencies other than the U.S. dollar.
The announcement, made public in a circular note distributed to the banks late Thursday, reflected efforts by the central authorities to steer away from the weak dollar amid a Sudanese economic boom.
The new policy note, signed by central bank Governor Sabir Mohamed al-Hassan, said all central bank dealings would be in the euro starting with the New Year. For an unspecified provisional period, dealings along with the euro would also be possible in the Saudi riyal and the Emirates dirham.
The note also advised commercial banks in the country to conduct their dealing with customers and foreign partners in currencies other than the U.S. dollar, with the view to “lessen the risk of continuing to deal in the U.S. dollar.”
The banks should advise their account holders to commute their U.S. dollar assets to other currencies and “enlighten them on the risks associated with maintaining balances in the American dollar,” it said, without elaborating what those risks could be.
The advisory also said the commercial banks may continue to accept the U.S. dollar but would themselves “bear the risks resulting from those dealings.”
However, the central bank made it clear that moving from the dollar to other currencies is “optional and not mandatory for the banks or clients.”
There was no immediate explanation as to what prompted the measure.
Despite its currency’s longstanding link to the U.S. dollar, after a decade of American sanctions, Sudan has few commercial ties to the U.S. at this point.
Nearly three-quarters of Sudan’s trade is with Arab and Asian nations and Sudanese firms have already shown themselves able to avoid dollar transactions by using the euro instead.
(AP)