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Sudan Tribune

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Sudan central bank allows Forex bureaus to determine own exchange rate

May 17, 2012 (KHARTOUM) – Foreign exchange (Forex) bureaus in Sudan will be able to buy and sell currencies using their own exchange rate away from the official one, it was announced today.

Central Bank of Sudan (CBoS) ( Photo Reuters)
Central Bank of Sudan (CBoS) ( Photo Reuters)
The privately owned Al-Shorooq TV on its website quoted the deputy Secretary General of Forex bureaus union Abdel-Moniem Nur al-Deen as saying that this decision was communicated to them during a meeting with central bank officials.

Abdel-Moniem said that Forex bureaus no longer have to abide by the official exchange rate and can now use the market rate in their daily trading operations.

The move was taken in order to curb the flourishing black market for hard currency and also to attract transfers by Sudanese expatriates abroad, he added.

Sources told Al-Shorooq TV that the central bank will soon allow commercial banks to do the same.

Since the secession of oil-rich South Sudan, Sudan has struggled to contain the deteriorating value of its own currency as the flow of hard currency was sharply curtailed.

The US dollar traded for twice the official rate of 2.7 Sudanese pounds despite multiple interventions by the central bank to inject hard currency into the market.

But because of the depleting Forex reserves, the ability of the Central Bank of Sudan to influence the exchange rate on the market has been limited.

Khartoum dispatched several delegations to friendly nations, particularly Arab Gulf states, seeking help but so far only Qatar has made a commitment of $2 billion, which will be used to buy government bonds.

Last week, officials in Sudan’s central bank announced that it has received a “large” transfer of cash from an unnamed foreign source. They projected that this would soon reflect in a 50% decrease in the exchange rate of the US dollar on the black market.

Banks and Forex bureaus are only allowed to sell a limited amount of hard currency to individuals and only if they can provide a valid justification including travel for medical treatment or studying abroad.

(ST)