July 24, 2013

Sudan Currency Falls Ahead of Oil Deadline

Sudan’s currency hit a new low on Tuesday, traders said, ahead of Khartoum’s deadline to shut a pipeline carrying South Sudanese oil worth billions of dollars to both impoverished nations.

South Sudan President Salva Kiir (R) and Sudan’s President Omar Hassan al-Bashir shake hands at the State House in Juba on April 12, 2013.
South Sudan President Salva Kiir (R) and Sudan’s President Omar Hassan al-Bashir shake hands at the State House in Juba on April 12, 2013.

One United States dollar sold for 7.35 Sudanese pounds, black market traders said.

The pound has now lost about 46 percent of its value on the widely used black market since September 2011, after South Sudan separated earlier that year with most of the formerly united country’s oil production.

The pipelines and the Red Sea export terminal remained in the north but a fee dispute led the South to shut its production early last year.

Khartoum and the South’s government in Juba reached a deal in March allowing the oil to flow again.

Then, in a surprise move, Khartoum last month gave companies 60 days to stop transporting oil from South Sudan after President Omar al-Bashir accused the Juba government of backing rebels in the north.

Juba denies supporting the insurgents and in turn says Khartoum assists rebels on southern soil. Observers say both countries have engaged in the practice.

On Monday the African Union and east African bloc, the Inter-Governmental Authority on Development, inaugurated a panel to probe allegations of rebel support by each side.

The AU urged both Sudan and South Sudan to avoid any “unilateral action” while the investigation continues.

“I think the reason for the pound’s fall is the decision to shut the pipeline,” one black market trader said.

Sudan uses multiple official exchange rates, including a central rate for government transactions which on Tuesday stood at 4.3980-4.4200 for one US dollar, according to the official SUNA news agency.

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