Home page | News Monday 11 July 2011
Sudan central bank ceases control over the South’s financial system
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July 10, 2011 (KHARTOUM) – The Central Bank of Sudan (CBoS) on Sunday
announced a set of measures aimed at breaking off its control over the
financial system of the South following its official independence
yesterday.
The statement by CBoS said that South Sudan banks should be treated as
foreign which means that any wire transfers cannot take place with
Southern banks unless collateral is provided in the form of
transferrable foreign currency used in the transaction.
CBoS governor also instructed a halt of clearing house with the
branches of commercial banks operating in South Sudan as of July 9th.
He also ordered that checks issued by Southern banks would no longer
be collected by Northern banks.
Southern banks will no longer have access to electronic banking
network system, the statement said.
In a related issue, a significant drop in the exchange rate of
Sudanese pound has been attributed to concerns over the South’s
separation and its impact on the economy.
Agence France Presse (AFP) quoted a black market currency trader as
saying that the dollar is now sold for 4.20 pound from 3.47 a week
ago.
But CBoS said today that the exchange rate has declined after it
injected hard currency into the banks and Forex bureaus and will
continue to do so in the coming period.
North Sudan — where 80 percent of the 40 million Sudanese live — will
lose 75 percent of the African country’s oil production of 500,000
barrels a day located in the south. Oil is the lifeblood for both
economies.
The south will need northern refineries and the country’s only port
for the next years to sell its oil, but economists expect northern oil
revenues to gradually fall below the current 50-50 split.
Analysts say the loss of revenues will worsen a scarcity of foreign
currency in north Sudan where importers struggle to get their hands on
dollars. Sudan depends on foreign imports for food and many other
articles, especially technology.
(ST)
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