KHARTOUM Dec 25 Black market rates for the
Sudanese pound hit a record low against the dollar on the black
market on Tuesday as importers struggled to get hard currency,
likely adding to pressure on the government to raise state
There is little foreign or official market trading in the
Sudanese pound but its rate on the black or parallel market is
an indicator of the mood of the business community and ordinary
people tired after years of economic crises and ethnical
The rate is watched by foreign firms which sell products in
pounds but struggle to convert profits into dollars. Cell
operators Zain and MTN or Gulf banks such as
Dubai Islamic Bank have investments in Sudan.
Sudan has avoided an "Arab spring" like neighbours Egypt and
Libya but the government faces dissent over spiraling inflation
due to the loss of three-quarters of its oil production when
South Sudan seceded in July 2011.
Oil was not only the main source for state revenues but also
for dollars needed to fund imports as Sudan produces little.
Annual inflation hit 46.5 percent in November, triple the 15
percent in June 2011, the last data before southern secession.
On Tuesday, one dollar bought up to 7.1 pounds, passing for
the first time the psychological mark of 7. Last week, the rate
on the black or parallel market, which has become the benchmark,
was around 6.9. At the time of secession it was 3.3.
By contrast, the official rate stands at around 4.4
but it has little value as the central bank and commercial
lenders are unable to produce enough dollars through official
channels for import firms, traders say.
"It is almost impossible to get dollars in Khartoum and it
gets worse," said a black market trader. "The mood is very bad."
The opposition has been unable to mobilize mass protests
against veteran President Omar Hassan al-Bashir but the pound's
slide has sparked calls even from inside his ruling party to
increase salaries in the public sector, where most people work.
Analysts say such a move would further fuel inflation and
weaken the pound as the central bank would have to print yet
Trade unions also called on Sunday on the government to
increase the minimum salary, state news agency SUNA said.
To offset the loss of oil the government has been boosting
gold exports and trying to buy up all locally-produced gold --
often above the market price, according to industry sources,
which is fuelling inflation.
South Sudan was supposed to pay Khartoum to pipe crude
exports through Sudan, but the new nation shut down its entire
350,000-barrel-per-day output in January in a row over fees.
The two signed a series of deals in September that paved the
way to restarting exports, but disagreements over how to
implement them have delayed the resumption.
Both countries held talks several times this month but have
yet to agree on how to set up a border security zone, a move
needed to restart oil exports. They will resume talks in
(Reporting by Khalid Abdelaziz; Writing by Ulf Laessing;
editing by Patrick Graham)