Central Bank of Sudan injecting more foreign currency into the market

March 16, 2011 (KHARTOUM) – The central bank of Sudan (CBoS) announced on Wednesday that it is injecting more foreign currency into the banks and Forex bureaus saying that there are indications of improvement in the country’s reserves of hard currency.

A statement released by CBoS said that the optimism stems from increases in oil prices, Sudan’s main export, and better utilization of local gold production and selling it abroad leading to more inflow of hard currency.

Furthermore, the top financial authority noted its decision to enter the market as a buyer of gold and building reserves of it for the purpose of exporting it to build “comfortable” reserves of foreign exchange.

Sudan has witnessed increased interest in gold exploration by individuals and companies which the government hope to compensate for loss of oil revenue with the South’s secession next July.

Most of Sudan’s oil reserves are in the south, and there are fears that if it becomes independent the north’s economy will suffer a shock.

As part of an austerity package approved earlier this year, the government banned certain imports to reduce the outflow of hard currency and prevent what officials labeled as “economic collapse”.

Furthermore, the CBoS imposed harsh restrictions on cash transfers abroad and the amount of hard currency travelers can carry. Many banks have said that they are unable to meet customers’ demand for Forex.

An incentive system was introduced by the CBoS last November aimed at encouraging people with hard currency to come forward and sell their holdings at a price higher than the official exchange rate.

(ST)