Sudan to Unify Currency Rate in Bid to Win Foreign Investment
Sudan is taking steps to close the gap between its official and unofficial currency rates and scrap subsidies by end-2019 to win foreign investment after U.S. sanctions ended, Minister of State for Finance Magdi Hassan Yassin told Reuters on Tuesday.
Washington last month suspended 20-year sanctions and lifted a trade embargo because it decided that Sudan had made progress on counterterrorism cooperation and on internal conflicts such as one in Darfur. It also unfroze assets and removed financial restrictions.
Sudan is hoping the measures will help the import-dependent country get back on its feet after years of hardship caused partly when the south seceded in 2011 and it lost three-quarters of its oil output, its main source of foreign currency.
“We will gradually lift subsidies in accordance with the five-year plan by the end of 2019. … Most of the things that hinder foreign investment are being addressed and there are reforms to investment and company laws,” Yassin said.
Sudan last November cut fuel and electricity subsidies and announced import restrictions to save scarce foreign currency.
Sudan’s year-on-year inflation decreased in October to 33.08 percent from 35.13 percent in September on the back of lower food and beverage prices, a report from Sudan’s central statistics agency said Tuesday.
Sudan’s central bank has held the official exchange rate at 6.7 pounds to the dollar but currency is largely unavailable at that price. The pound currently hovers around 23 pounds to the dollar, according to currency traders.
“The 2018 budget, which will start in January, will be the first budget after the U.S. ended the economic sanctions. … The central bank will set policies to unify the exchange rate,” Yassin said.
But “there are no directions to float the pound,” he added.
Analysts and officials say Sudan must conduct tough reforms such as floating its currency if it hopes to benefit from sanctions relief and begin to attract new investment.