Sudanese pound falls further despite central bank support
KHARTOUM Aug 9 (Reuters) – The Sudanese pound has fallen further on the black market despite the central bank’s pledge to provide banks with more dollars to meet rising hard currency demand following the secession of oil-rich South Sudan, traders said on Tuesday.
Sudan has been hit by a scarcity of dollars which analysts say could get worse after South Sudan became independent on July 9, taking with it 75 percent of the old country’s 500,000 barrels a day of oil production.
On Monday, the central bank in Khartoum said it would supply banks with more dollars to meet rising demand it ascribed to “speculators” and southern Sudanese who will receive their last paychecks in dollars.
The central bank poured more than $500 million into the local market in July.
But black market traders said the dollar was buying 3.7 pounds on Tuesday, up from rates of 3.4-3.5 pounds cited until recently. The official rate is around 3 pounds per dollar.
“There is a big rise in demand for dollars,” said one black market dealer in Khartoum. “The dollar will rise further (to the pound).”
“Southern are demanding more dollars, but (northern) citizens also change money into dollars for fear of economic problems,” he said.
Khartoum yet has to agree with the South on a usage fee for oil facilities and refineries in the north on which the new country relies to to sell its oil, but analysts say it will probably get less than the equal split of oil revenues agreed under a 2005 peace deal.
Falling oil revenues would make it more difficult for the north — where 80 percent of 40 million Sudanese live — to get foreign currency needed to buy imports in a country weighed down by years of conflict, high inflation and a U.S. trade embargo.
Annual inflation was 15 percent in June, up from 9.8 percent in November, when the central bank effectively devalued the pound to erase the need for a black market, a measure that has had little success.
Both Sudans plan to launch new currencies following Southern independence, which could carry risks for both sides if the moves are not coordinated.
There is also no sign of progress on how to share future oil revenues between the two countries. Last week, the North held a southern oil cargo in its Port Sudan terminal until Juba paid customs fees.
The South has rejected a northern proposal to charge a usage fee for its oil facilities of more than a third of the South’s current export value, based on Reuters calculations. (Reporting by Khalid Abdelaziz; Writing by Ulf Laessing; Editing by Catherine Evans)
Sudanese pound falls further despite central bank support
KHARTOUM (Reuters) – The Sudanese pound has fallen further on the black market despite the central bank’s pledge to provide banks with more dollars to meet rising hard currency demand following the secession of oil-rich South Sudan, traders said on Tuesday.
Sudan has been hit by a scarcity of dollars which analysts say could get worse after South Sudan became independent on July 9, taking with it 75 percent of the old country’s 500,000 barrels a day of oil production.
On Monday, the central bank in Khartoum said it would supply banks with more dollars to meet rising demand it ascribed to “speculators” and southern Sudanese who will receive their last paychecks in dollars.
The central bank poured more than $500 million into the local market in July.
But black market traders said the dollar was buying 3.7 pounds on Tuesday, up from rates of 3.4-3.5 pounds cited until recently. The official rate is around 3 pounds per dollar.
“There is a big rise in demand for dollars,” said one black market dealer in Khartoum. “The dollar will rise further (to the pound).”
“Southern are demanding more dollars, but (northern) citizens also change money into dollars for fear of economic problems,” he said.
Khartoum yet has to agree with the South on a usage fee for oil facilities and refineries in the north on which the new country relies to sell its oil, but analysts say it will probably get less than the equal split of oil revenues agreed under a 2005 peace deal.
Falling oil revenues would make it more difficult for the north — where 80 percent of 40 million Sudanese live — to get foreign currency needed to buy imports in a country weighed down by years of conflict, high inflation and a U.S. trade embargo.
Annual inflation was 15 percent in June, up from 9.8 percent in November, when the central bank effectively devalued the pound to erase the need for a black market, a measure that has had little success.
Both Sudans plan to launch new currencies following Southern independence, which could carry risks for both sides if the moves are not coordinated.
There is also no sign of progress on how to share future oil revenues between the two countries. Last week, the North held a southern oil cargo in its Port Sudan terminal until Juba paid customs fees.
The South has rejected a northern proposal to charge a usage fee for its oil facilities of more than a third of the South’s current export value, based on Reuters calculations.
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