Su­dan to unify cur­rency rate in bid to win for­eign in­vest­ment

The Daily Star (Lebanon) - - BUSINESS -

CAIRO: 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 United States sanc­tions ended, Min­is­ter of State for Fi­nance Magdi Has­san Yassin told Reuters 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-onyear 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. –

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