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Sudan devalues currency by 30 percent amid dollar shortages

Sudan devalues currency by 30 percent amid dollar shortages

KHARTOUM, Nov 11 (Reuters) – Sudan’s central bank has devalued the Sudanese pound by around 30 percent against the dollar, the second such move in little over a year as the African country struggles with hard currency shortages.

Sudan’s economy has been in turmoil since South Sudan’s secession in 2011 took away of three-quarters of oil production. Oil was the driver of the economy and source for dollars needed for food and other essential imports.

Sudan produces too little to feed its around 32 million people.

Bidding prices for the pound were stated as 5.6871 for one dollar, compared with 4.4 previously, central bank data on Reuters terminals showed on Monday. Ask prices were 5.7155. In 2011, the official rate was around 3.

The central bank has been trying to bridge a ballooning gap with the black market rate where one dollar costs 7.8 pounds as import firms struggle to get their hand on hard currency. The black market rate has become the benchmark for banks and firms.

The rate is watched by foreign firms such as cellphone operators Zain and MTN and by Gulf banks who sell products in pounds and then struggle to convert profits into dollars. Gulf investors also hold pound-denominated Islamic bonds sold by the central bank.

A central bank official, asking not to be named, said the rate had been already changed in September when the government cut fuel subsides. He did not elaborate.

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This entry was posted on November 11, 2013 by and tagged .

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