A number of major currency dealers have reportedly been arrested in Sudan, and others have fled abroad, in a second day of tough government measures by the Khartoum government to stem the downward spiral of the Sudanese Pound (SDG) against the US Dollar.
A number of currency dealers told Radio Dabanga that for the second day in a row, the security authorities have continued their intensive campaigns to stop the dealers on the parallel market where they arrested a number of major well-known currency traders.
Other currency traders have reportedly fled abroad, specifically to Ethiopia and the Gulf countries, to avoid arrest and presidential directives which raise the penalty for trading in currency to 10-years’ imprisonment from three years and the confiscation of money. The new charges of ‘sabotaging of the national economy, money laundering and financing terrorism’ are punishable by death or life imprisonment.
The traders pointed to a halt in buying and selling operations among major traders on Tuesday.
The clampdown follows and announcement by the government that it will take legal action against money laundering and actions that would sabotage the national economy, such as unregulated foreign exchange dealing and non-payment of export royalties.
On Tuesday currency traders attributed the temporary rise of the Dollar against the Sudanese Pound to SDG 23 – from SDG 28 last week – to the reluctance of major traders to buy and sell for the fear of security action, but they expected the Pound to drop further against the Dollar because “the Central Bank of Sudan does not have cash reserves covering the demands of import and pharmaceutical companies. Besides, the Bank of Sudan does not have the Dollar in order to control the exchange rate.”
They confirmed that all remittances of expatriates are monopolised by the parallel market.
Strict legtal measures
Government officials, in a meeting chaired by President Al Bashir, discussed the exchange rate control measures and legal measures against foreign currency dealers on Monday. Finance Minister Mohamed Osman El Rikabi informed the press afterwards that several decisions were taken, such as stopping government companies' purchase of foreign currency requests, rationalising travel of government bodies and companies and conditioning these travels with approval of the Cabinet.
“Strict legal measures will be taken by specialised prosecutors in dealing with foreign exchange, smuggling subsidised goods, gold, and export commodities,” El Rikabi stated. Currency brokers and smugglers who dodge paying export royalties may also expect more legal measures.
Attorney-General Omar Ahmed Mohamed confirmed that legal action will be taken against foreign exchange dealers “immediately”: “This action is a sabotage of the national economy.” Mohamed said that these legal actions, as well as prosecutions of smugglers, will be done with the knowledge of the public.
Director of the Central Bank of Sudan, Hazim Abdelgadir, added that a decision was taken to review the policies of the purchase and export of gold by private companies in Sudan. The meeting decided to activate all regulatory laws on dealing with foreign exchange and banking activity in general.
“There will be very strict measures on exporters who do not return the obtained revenues to the country,” Abdelgadir said.
The Sudanese Pound has continued its plunge against the US Dollar, marking a historic rate of SDG28 in the black market last Thursday. Economic experts said it may well exceed SDG30 in the coming period. Some have repeatedly said that the Bank of Sudan indirectly floats the Sudanese Pound.