The Sudanese pound strengthened on the black market on Thursday to 16 pounds to the dollar from 19, currency traders told Reuters. Sudan's central bank held the official rate at 6.8 pounds to the dollar.Bankers and traders credited the gains to former president Barack Obama's decision, just before he left office earlier this month, to ease US sanctions on Sudan. Doing so will lift a 20-year-old trade embargo against Sudan, unfreeze assets and remove financial sanctions.
Obama acted in response to Khartoum's cooperation in fighting Islamic state and other groups. His decision will be delayed for 180 days, pending efforts by Sudan to improve its human rights record and resolve outstanding political and military conflicts. "The results of the sanctions lift have started causing shocks in the parallel market, and speculators will incur losses," Sudanese Industrial Development Bank Manager Musaed Abdel-Karim told Reuters.
"The other reason is the reception of the grant from the United Arab Emirates. This could lead the central bank to take additional measures to stabilize the exchange rate," Abdel-Karim said. The United States first imposed sanctions on Sudan in 1997, including a trade embargo and a block on government assets, for human rights violations and on concern over terrorism. It laid on more sanctions in 2006 for what it said was complicity in violence in Darfur.
The head of Sudan's central bank signed an agreement with the Abu Dhabi Fund for Development last week for a $500 million deposit, state news agency SUNA reported.
Sudan's economic problems have been building since the south seceded in 2011, taking with it three-quarters of the country's oil output, the main source of foreign currency and government income.