Sudan central bank imposes additional restrictions on selling foreign currency
July 19, 2010 (KHARTOUM) — The Sudan central bank today announced new measures aimed at restricting the sale of foreign currency in a sign of further deterioration in the country’s ability to control the shortage in hard currency.
A statement released by the central bank today said that effective August 28, Sudanese travellers will be able to buy foreign currency before leaving the currency but can only receive it at the airport.
The foreign exchange bureaus will provide a receipt to those travellers with the amount they bought and that will be used to redeem the actual at the airport after passing through customs and immigration.
Any buyer of foreign currency have had to prove the purpose of his purchase.
The central bank last year listed ten classes of people allowed to buy foreign currency which includes travellers for leisure or medication, students, participants in conferences, foreign workers and pilgrims.
The move appears to be aimed at minimizing the demand for hard currency which leads to depletion in foreign currency reserves. Sudan refuses to disclose the amount it has in reserves but according to data compiled by Bloomberg it amounts to $956.2 million as of January 2010.
Last month, the central bank said it is injecting more foreign currencies into the market and make it available to banks in order to meet client needs particularly to import goods. It also disclosed that it is tightening control of exchange bureaux to enforce rules.
In one instance the central bank closed down Al-Aroos bureaux citing multiple violations and also froze accounts of individuals suspected of fuelling the foreign exchange black market.
The move failed to curb the continued drop in the price of the Sudanese pound against the U.S. dollar as the spread between the official price and that of the black market reached 10%.
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.
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Paul Ongee
Sudan central bank imposes additional restrictions on selling foreign currency
Continued restrictions on selling foreign currency would not help stabilize depreciating Sudanese pounds against the US dollar and other foreign currencies. Despite economic embargo and political instability, Sudan has failed to diversify its sources of investment. I don’t think if Sudan still has that amount of $956.2 million since January this year. We’re now in July and oil revenue is likely to remain the single source up to 2011. Nobody knows how the economic outlook will be after referendum.
Paul Ongee
Khartoum, Sudan