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Sudan Tribune

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Sudan central bank eases restrictions on hard currency

February 27, 2011 (KHARTOUM) – The Central Bank of Sudan announced two set of measures aimed at easing restrictions on hard currency as officials here say that the foreign exchange market has stabilized.

The Central Bank of Sudan (CBoS) in Khartoum (Photo: Reuters)
The Central Bank of Sudan (CBoS) in Khartoum (Photo: Reuters)
Under the revised rules, cash withdrawals are now allowed from special accounts in accordance with the internal regulations of each bank, along with doubling the amount of hard currency travelers can buy.

The central bank said that in addition to the recent stabilization in the foreign exchange market, the reasons which caused deterioration in the position of the Sudanese pound have disappeared in reference to speculations about the economic effects of the South’s separation which becomes official next July.

Officials in the past have said that the public has been concerned about the prospects of renewed conflict between the North and the oil-producing south and were therefore piling dollars.

Most of Sudan’s proven daily output of 500,000 oil barrel is extracted from oilfields in the south whereas the pipelines infrastructure and refineries are based in the north. Both sides need to maintain cooperation on oil after secession to sustain their economies which depend greatly on oil revenues.

Last year, the authorities introduced the premium concept to encourage holders of forex to come forward and sell their holdings at a generous rate close to that of the black market. The margin was initially set at 16.29% above the official price.

The pro-government Al-Rayaam newspaper said that the central bank aims to unify both the official rate and that of the black market at around 3 pounds to the dollar although the national budget forecasted a rate of 2.7 pounds.

Many observers say that any drop in revenue from oil exports and a slowdown in foreign investment will delay any recovery to the foreign exchange market and the economy as a whole. Khartoum is hoping that it will compensate for loss of oil through non-petroleum sectors such as agriculture and gold mining.

Sudan has stopped imports of some goods and raised duties on others to lower outflow of hard currency.

The finance ministry is already facing the possibility of lawsuit by importers of used cars who say that the minister granted exceptions to some unspecified parties despite a total ban imposed since last year.

Sudan had previously estimated imports of second-hand automobiles to be at $958 million in 2009.

A Kenyan airline has suspended operations in Sudan this month over its inability to obtain hard currency and others complain that they are unable to transfer their revenue out of the country because of instructions by central bank prohibit moving out large quantities of foreign currency.

(ST)