Sudanese pound sinks to new lows against the US dollar

October 16, 2010 (KHARTOUM) – The Sudanese pound declined further against the US dollar despite intervention by the central bank this month to control the shortage in foreign currency and bring the local currency under control.

The pro-government Al-Rayaam newspaper said on Friday that the official exchange rate on Thursday was 2.37 Sudanese pounds to the dollar. On the black market the rate was around 3.20 Sudanese pounds.

The governor of Sudan’s central bank Sabir Mohamed Al-Hassan had said at a press conference in late September that the gains made by the dollar over the against the pound were “generated by rumours and because of uninformed information concerning the effect of the [2011 South Sudan] referendum….and the effect it will have on the economy.”

Al-Hassan at the time announced that they will inject more foreign currency into the banking sector and forex bureaus.

The governor declined to answer reporters’ questions on the size of the intervention or the extent of Sudan’s forex reserves saying asking for those details was like asking a woman her age.

This has succeeded in bringing the dollar down to 2.75 against the dollar on the black market, compared with rates of around 3.10 when the measures were announced.

Some analysts have expressed doubts over the capability of the central bank to make any meaningful intervention at this point given the depletion of foreign reserves at its disposal.

A source described as “informed” told Al-Rayaam that the rise in dollar was a result of improved trade between the North and South after many Southerners living in the North sold their properties and bought dollars before heading South.

Southerners across the country and abroad will choose whether to split Africa’s largest country or remain in a united Sudan. Most observers expect an overwhelming majority of Southerners voting in favor of secession.

The separation of Sudan into a two states will deny the North billions of dollars in revenue generating from vast oilfields in the south of the country. Currently the North and the South are splitting the proceeds of crude in accordance with the peace accord.

(ST)