Sudan receives 'large amount' of hard currency

Reuters, Saturday 19 May 2012

Cash from unnamed 'friendly' countries will stabilise the local currency, says central bank official in Khartoum

Sudan cash
Surprise influx of cash provides relief for Sudan's currency (Photo: Reuters)
Sudan's central bank has received "a large amount" of hard currency from abroad and plans to use it to stabilise the pound following the local currency's effective devaluation, the deputy central bank governor said in remarks published on Saturday.
Deputy governor Badr El-Din Mahmoud told al-Sudani newspaper the central bank had received the foreign currency from "friendly" countries. "It arrived in the treasury of the central bank in the past few days," he said, without elaborating.
"We will meet the country's currency demands until the end of this and next year," he said, adding that all requests to fund imports would be met.
He did not give any details of where the money came from or the terms under which it had been transferred to Sudan. Sudanese newspapers reported earlier this year Qatar would give Sudan $2 billion in aid but this was never confirmed by either country.
The deputy governor was not immediately available for comment on Saturday.
Sudan's economy has been battered since the country lost three-quarters of its oil production to South Sudan when the latter became independent in July.
The loss of oil revenues, the main source of state income and dollar inflows, has hit the pound hard and driven up inflation. One dollars buys around 5.5 Sudanese pounds on the black market, way above the official rate of around 2.7.
Sudan said on Friday it would allow foreign exchange bureaux and banks to trade dollars at a level close to the black market rate, to end the increasingly widening spread over the official rate, a move that effectively devalued the currency.
Deputy governor Mahmoud told the newspaper exchange bureaux could set a dollar rate they found appropriate, while the central bank would consult commercial banks this week to set a rate below 5 pounds.
He said the new rate would erase the black market. "It will end (the spread) with one single rate."
He also said Sudan had made $1 billion from gold sales so far this year and expects to make $3 billion in 2012, upping a previous forecast of $2.5 billion from gold sales. Exports would benefit from a new gold refinery in Khartoum that just started work, he added.
Sudan is hoping to develop its gold, agriculture and other industries to make up for the loss of oil. But experts say Sudan's gold exports are hard to verify because much of the output comes from amateur seekers whose output is hard to verify and partly gets smuggled abroad.
As a result of a scarcity of dollars, inflation shot up to 28.6 per cent in April, more than triple the level of November 2010. Sudan needs to import much of its needs.
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