Sudan warns foreign currency speculators of severe punishment

August 08, 2011 (LONDON) – The Central Bank of Sudan (CBoS) on Monday affirmed its ability to meet the “true demand” of customers for hard currency through increasing the daily injection into banks and forex bureaus.

A statement released by the highest financial authority today quoted CBoS deputy governor Badr al-Deen Mahmood as saying that improved revenues from gold and non-petroleum products as well as decline in imports helped boost foreign exchange reserves.

He said Sudan sustained a surplus in both the balance of trade by $3.7 billion and current account by $1.3 billion in the first half of 2011 .

The CBoS official said the recent surge in demand for hard currency is artificial and a result of speculations. He added that South Sudanese citizens who worked in the North added to this by exchanging their end of service payment for dollars.

He issued a strong warning to speculators and those who trade illegally in hard currency with stern measures noting that new laws allow for imprisonment and confiscation against the violators.

The Khartoum government is keen to clamp down on the thriving black market where foreign currency is dealt unchecked and on which US$1 now buys up to SDG3.5.

South Sudan seceded from North Sudan in early July denying Khartoum 75% of its oilfields which was a stable source of foreign currency. Although the new state will be forced to use the oil refineries and pipelines for a fee, it will inevitably be subject to a significantly reduced GDP.

The two countries are at odds over the oil transit fees that should be assessed prompting South Sudan to talk about seeking other outlets to export its oil.

North Sudan announced the introduction of a new currency on July 24th after South Sudan preemptively launched its new currency on July 19th.

(ST)