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New currency rules for Sudan export revenues

March 13 - 2018 KHARTOUM
Central Bank of Sudan (File Photo)
Central Bank of Sudan (File Photo)

The periodic meeting for adjustment of the Sudanese exchange rate approved opening investment in uranium after consulting with the security authorities. The government has also announced new measures to curb currency speculation.

This has been announced following a meeting under the chairmanship of President Omar Al Bashir at the Republican Palace in Khartoum.

Penalties for delaying deposit of export revenues:

Minister of Trade Hatim El Sir said the meeting recommended stimulating the authorities that control the smuggling of minerals and foreign exchange, as well as amendments to the Trade Act.

Currency speculation

The most important of these amendments – aimed to discourage currency speculation – is the criminalisation of delaying the deposit of export revenues of the Sudanese goods with the most severe penalties.

The director of the Bank of Sudan, Hazim Abdelgadir said that the meeting has approved amendments to the foreign exchange act and the tightening of penalties on the smuggling of cash and gold, this together with the establishment of a special mechanism for the flow of medicine

He said that in the coming period the Bank of Sudan will focus on the provision of local liquidity to the commercial banks and ATMs.

A number of customers in Khartoum and El Gezira have complained of their inability to draw their money from ATMs due to lack of cash.

Currency rates

Sudan has been short of hard currency for years. After Dollar rates on Sudan’s parallel forex market began to rise rapidly in 2010, the Central Bank of Sudan announced that the lack of hard currency, required for the importation of basic commodities such as wheat or medicines was becoming acute. The secession of South Sudan in July 2011, with which Khartoum lost two-thirds of its oil revenues, exacerbated the crisis.

As the situation continued to push the black market rate of the US Dollar upwards in 2016, Khartoum decided in October that year on an economic reform programme, which according to President Omar Al Bashir was needed “to avoid the collapse of the country”.

The measures proposed to curb the fast rise of the US Dollar included the import of certain types of consumer goods, “in order to reduce the importation bill”.

In December last year, the Sudanese government decided to implement a new austerity policy in a bid to solve the financial crisis in the country. The customs rate of the US Dollar was raised from SDG 6.7 to an indicative SDG 18, to halt the plummeting Pound on the black market.

The measures were implemented in the first week of January, leading to the doubling, and in some cases tripling of basic commodities. The sudden raising of the Dollar rate also led to the halting of incoming and outgoing traffic at the Port Sudan harbour, as suppliers refused to have their goods cleared.

The Dollar rate however, continued to rise. The price of gold witnessed a major leap as well. On February 5, Khartoum increased the indicative exchange rate of the US Dollar again, from SDG 18 to SDG 30. The prices of wheat and as well of sorghum jumped. 

On February 7, the Central Bank banned any import operations by banks using their own foreign currency without obtaining its prior approval.

On Thursday, the Dollar rate at the black market recorded SDG 32, after it sold for a high SDG 42 in early February.

Imports

The National Chamber of Importers in Sudan plans to submit a protest memorandum to the Governor of the Central Bank about the bank’s policies concerning import procedures.

On Thursday, members of the Executive Office of the Chamber -which is a part of the Sudanese Federation of Chambers of Commerce- said in a press statement that the bank’s current policies are damaging imports and importers.

They also criticised the ban on a number of goods by the Ministry of Commerce.

They said that the memorandum will also contain proposals to eliminate the injurious effects of its recent decisions on imports and businesses in the country.

* Based on the official US Dollar rate quoted by the Central Bank of Sudan (CBoS)


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