May 21, 2012 / 6:03 PM / in 6 years

Sudan starts trading devalued pound to end black market

KHARTOUM (Reuters) - Sudanese foreign exchange bureaux started trading Sudanese pounds at a devalued rate on Monday as part of an effort by officials to curb illegal trade and stablise the currency.

Black market dealers in the capital Khartoum said they would continue to buy and sell currency for now to take advantage of the lingering - albeit slimmer - gap between the official and unofficial prices.

“The central bank’s decision had a limited impact on our business, but we’re still working, both buying and selling,” said one black market trader who was interrupted by a customer seeking to sell dollars.

“There is still supply and demand from our customers, up to this moment,” said the dealer who, like others, asked not to be named.

Sudan has been struggling to cope with an economic crisis since South Sudan seceded over the summer. The southern nation took about three quarters of the country’s oil output, the main source of exports and state revenues for both sides.

The resulting foreign currency shortfall hammered the value of the Sudanese pound on the black market, causing it to fall to as low as 6.2 pounds to the dollar in April, while the official rate has remained at around 2.7 pounds to the dollar.

To curb the illegal trade and attract foreign currency from Sudanese living abroad to help stabilise the pound, Sudan said it would allow exchange bureaux and banks to trade dollars at a level close to the black market rate.

The bureaux were buying from the central bank at 5 pounds per dollar and selling to customers at a rate of 5.02 pounds per dollar on Monday, Abdel Moneim Nur al-Din, deputy head of Sudan’s association of foreign exchange bureaux.

Black market traders said they were buying dollars for about 5.2 pounds, down from around 5.6 pounds last week, and selling at a rate of about 5.3 to 5.4 pounds.

Nur al-Din said the new rate would help the exchange bureaux compete with the black market, which had been dominating trade, and eventually eliminate it altogether as long as the central bank could supply enough foreign currency to meet demand.

“I think this is the first step in the right way,” he said.

Commercial bank officials could not immediately be reached for comment about whether they had been allowed to trade pounds at a new rate yet.

It is unclear how much foreign currency the central bank has at its disposal to supply the market. The central bank’s deputy governor was quoted on Saturday by local media as saying the bank received a “large amount” of hard currency from abroad, but did not elaborate.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below