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Sudan names new central bank governor ahead of country split

The new governor, Mohamed Kheir el-Zubeir, will have to deal with the difficult foreign exchange situation after secession

Reuters, Monday 7 Mar 2011
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Sudan on Monday named former state finance minister Mohamed Kheir al-Zubeir as the new governor of its central bank, a day after the resignation of his predecessor Sabir Mohamed al-Hassan.

The timing of Hassan's departure, just four months before the secession of the country's oil-producing south and in the midst of an economic crisis, dismayed many.

But sources in the banking industry on Monday said they were encouraged by the speed of the replacement and Zubeir's experience.

"Dr Sabir is a loss. It is something that everyone agrees," said one senior banking official, speaking on condition of anonymity.

"Definitely Mohamed Kheir al-Zubeir's background -- as chairman of a bank, minister of finance -- will give comfort to the system," the official added.

Sudan's state news agency Suna announced the appointment with a text message alert: "Mohamed Kheir al-Zubeir appointed governor for Bank of Sudan."

Southerners overwhelmingly voted to declare independence in a January referendum, promised in a 2005 peace deal that ended decades of north-south civil war. The south is due to secede on July 9.

Uncertainty over how the two nations will disentangle themselves, and fears of a return to conflict, have added to an economic crisis that has created foreign exchange shortages, an effective currency devaluation and rising inflation.

"The greatest challenge for the new governor will be the foreign exchange situation after secession," said Abda al-Mahdi, the head of economic consultancy UNICON, before Zubeir's name had been released.

Mahdi, herself a former state minister of finance, added the governor would also have the tricky task of handling relations with the south after the split.

Up to 75 percent of Sudan's oil reserves, its main foreign currency earner, lie in the south and will be lost to the north after the split.

The south has also decided to introduce its own currency after separation and will need the north's cooperation to redeem the old Sudanese pounds circulating in its system.

Zubeir's job, which currently covers the whole country, will only cover the north after the south's secession.

Sudan's central bank on Sunday said Hassan, 65, was stepping down because of his age and the arduous nature of the job.

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