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19 April 2024

Sudan backs euro, shuns dollar

By Agencies


The Central Bank of Sudan has announced it would deal only in the euro starting from January 1, and advised local commercial banks to opt for convertible currencies other than the US dollar.

The announcement, made public in a circular distributed to the banks, reflected efforts by the central authorities to steer away from the weak greenback amid a Sudanese economic boom.

The new policy note, signed by Governor of the Central Bank Sabir Mohamed Al Hassan, said all Central Bank dealings would be in the euro starting with the New Year. For a provisional period, dealings along with the euro would also be possible in the Saudi riyal and the UAE dirham.

The note also advised commercial banks in the country to conduct their dealing with customers and foreign partners in currencies other than the US dollar, with the view to “lessen the risk of continuing to deal in the US dollar”.

The banks should advise their account holders to commute their US dollar assets to other currencies and “enlighten them on the risks associated with maintaining balances in the American dollar”, it said, without elaborating what those risks could be.

The bank’s advisory also said the commercial banks may continue to accept the US dollar but would themselves “bear the risks resulting from those dealings”.

However, the Central Bank made it clear that moving from the US dollar to other currencies is “optional and not mandatory for the banks or clients”.

There was no immediate explanation as to what prompted the measure.

Despite its currency’s longstanding link to the US dollar, after a decade of American sanctions, Sudan has few commercial ties to the United States at this point.

Nearly three-quarters of Sudan’s trade is with Arab and Asian nations and Sudanese firms have already shown themselves able to avoid dollar transactions by using the euro instead.

Last year, Sudan’s economy grew by 12 per cent, according to the International Monetary Fund. That growth was propelled by the estimated 500,000 barrels of oil produced each day – two-thirds of them bought by China. (AP)