18 November 2012

Sudanese Pound Falls Sharply On News of Oil Delay

Photo: UNEP
Oil rig (file photo): The country will only pump oil at about 70 percent of its former capacity.

Khartoum — The Sudanese pound has registered a sharp decline in value against hard currency following news that the resumption of exporting South Sudan's oil via Sudan might be delayed due to failure in security talks between the neighboring countries.

The US dollar traded in Sudan's black market of hard currency for 6.3 pounds on Sunday, compared with 5.5 after Sudan and South Sudan signed a deal in the Ethiopian capital Addis Ababa to resume the latter's oil exports through Sudan.

Failure in talks between the two countries this week to agree on the implementation of another deal concerning border security saw Khartoum renewing its threats not to allow resumption of oil exports and Juba saying it decided to reschedule plans to resume oil production.

Sudan says it wants South Sudan to sever its ties with the rebel Sudan People's Liberation Movement North (SPLM-N), which is fighting Khartoum in the border regions of South Kordofan and Blue Nile, before allowing Juba to start using its pipeline infrastructure and export terminals.

The rise in the dollar price tends to lead to exorbitant increases in the prices of basic commodities in the Sudanese markets.

Sudanese authorities clamped down in June and July this year on a number of protests sparked by inflation and austerity measures undertaken by the government to make up for the loss of three quarters of its oil revenues to South Sudan when the latter seceded last year.

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