Sudan imposes new restrictions on hard currency purchases
June 2, 2009 (KHARTOUM) – The Sudanese central bank announced today that it is imposing a new cap on the amount of hard currency available to individuals travelling abroad.
A third of the amount would be given in cash while the remaining amount will be wired to the buyer in the country he is departing to.
Furthermore the traveler would have to submit supporting documents as proof to his destination and his address.
The pro-government Al-Rayaam newspaper said that the exchange bureaus were also barred from dealing with diplomatic missions, regional or international organizations working in Sudan.
The new rule was justified by the central bank as a response to the quickly depleting foreign currency reserves. Sudan does not publish reports on the foreign reserves.
“The request is … in line with the policy of the Bank of Sudan to minimize the demand for foreign exchange” Mohammed Osman, an official in the bank’s policy unit told Reuters.
“We have had a big drop in our Forex reserves” he added.
In April Sudan’s central bank governor Saber al-Hassan said that oil revenue accounts for 80% of cash inflows.
Al-Hassan said that the central bank is losing 80% of oil revenue “which created additional burden” and noted that foreign investments from Arab Gulf states in particular as well as outside aid were negatively affected by the credit crunch.
The global financial crisis has sent oil prices down sharply from its record levels reached last year. Sudan is heavily dependent on oil exports to fuel its economic growth and to provide hard currency.
Sudanese businessmen have complained that lack of hard currency is restricting their ability to import and have led to low supply of some products raising its prices to the customer and therefore curtailing its demand.
Last March Sudan central bank set ten classes of people allowed to buy foreign currency which includes travelers for leisure or medication, students, participants in conferences, foreign workers and pilgrims.
Sudan is under US sanctions imposed since 1997 that includes 31 government owned companies which limits their access to US financial system and US dollars.
(ST)
Olatipol
Sudan imposes new restrictions on hard currency purchases
This is a comment to the topic,”sudan imposes new restrictions to hard currency purchases”.
Much as it is important for the central bank to maintain a favourable level of it foreign reserve given the current prevailing economic crisis, unless otherwise,i see this move may not reach it, as projected by the central bank.
How shall the central bank ensure that an individual only purchases the 1,500 set as a maximum amount yet, i believe, there are other local dealers in foreign currency within the country willing to sell any amounts to any person?
This brings in the question: “What happens to the person who needs, say USD./Euro. 2,000 +, yet he can not wait to purchase the following day?”. It is highly likable that he will go get from the next available dealer, and so forth till he accumulates the amounts he needs.
Given the possibility of the existence of the non-registered dealers, is there any “watchful – eye” in place to monitor their activites? What effective measures,if any,are there to ensure that this move is a success?
Unless otherwise, I just do not see it reaching there.
OLATIPOL,
KIU-Uganda