Off The Wire
Sudan currency slides on black market after wider trading band begins
KHARTOUM, Jan 30 (Reuters) - Sudan's currency hit about 37.5 SDG per dollar on black market trading on Tuesday, currency traders said, a roughly 10 percent fall from a week earlier, when the central bank widened the band at which banks could trade their scarce supply of dollars.
Sudan's currency has been weakening on the black market in recent weeks amid an acute currency shortage.
The currency stood at around 28 SDG to the dollar on the black market at the start of January, when Sudan devalued its official rate to 18 SDG per dollar from 6.7 SDG.
Businesses say they are largely unable to source their hard currency needs at this official price however amid a severe shortage in the formal banking system.
In a bid to improve dollar liquidity, commercial banks last week began selling dollars for around 20 SDG, up from 18 pounds previously, after the central bank widened the band at which banks can trade to 16-20 SDG per dollar.
Bankers however said liquidity remains low.
"We are dealing at 20 pounds to the dollar, but banks do not have enough foreign currency to meet import needs, so companies and importers are turning to the black market," said one banker.
Sudan's economy has been struggling since the south seceded in 2011, taking with it three-quarters of its oil output. But the United States lifted 20-year-old sanctions in October, and the IMF has advised it to embark on sweeping reforms including a currency float, a measure the government has rejected.
"The price of the dollar is rising daily. There is a very big shortage in the market and huge demand from companies, importers and citizens. We are going to see it rise further," said one black market trader.
(Reporting by Khalid Abdelaziz; Writing by Eric Knecht; Editing by Richard Balmforth)