Sudan adopts black market exchange rateBy REEM ABBAS in Khartoum | Monday, May 21 2012 at 14:29
The Sudanese pound will from today exchange to the dollar at near the black market rate as new regulations come into force.
A Central Bank of Sudan meeting last week allowed forex bureaus to from Monday trade near the unofficial market range in a bid to stem the widening gap between the black market and the government rates.
The black market rate has been about five Sudanese pounds to the dollar, compared at 2.7 pounds at the official rate.
The country's forex dealers' association was set to announce a rate of 5.2 to the dollar, just off the 5.8 prevailing on the black market. It is unclear if the government's move amounts to a devaluation.
"The CBOS wants to end the negative phenomena in the hard currency market," said an bank official statement, referring to what is known as "dollar tourism".
M. Mubarak who works in a travel agency told the Africa Review that for the past year, many businessmen made money flying people over to neighbouring countries in order to accumulate dollars as one is only allowed to receive dollars when travelling.
"In the beginning, you could exchange $1,000 at the official rate, which meant that if you sell it back in the black market, you made a lot of profit," said Mr Mubarak.
But the game changed when officials discovered this and limited travellers to exchanging Sudanese money for the dollar every three months.
"This is when businessmen began using people they know and taking the dollars they receive before traveling for a one-day trip to another country or a small amount of money," added Mubarak.
The significant difference between the official and black market rate drained Sudan of hard currency, which has been hard hit by the loss of oil billions after South Sudan's secession and subsequent hostilities.
People have also felt the need to bring hard currency into Sudan through unofficial channels so as to receive more Sudanese pounds in exchange.
At a Western Union branch in Omdurman's market in Khartoum state, queues have significantly decreased since 2010.
"You used to lose so much money if the money was wired through the central bank since you receive the money in Sudanese pounds not dollars as before," said A. Mohamed who works there.
Starting today, there will be no large difference between the two dollar rates in what analysts have termed a legalisation of the black market.
Last week, the government said that it would inject foreign cash through the CBOS into forex bureaus as it received a large amount of hard currency from abroad.
The Economist Intelligence Unit has estimated that Sudan's economy will shrink by nine per cent this year and just last month, inflation jumped to 28.9 per cent.
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