Sudan continues foreign currency auctions as pound slips in black market

A dollar fetched 470 Sudanese pounds on the black market, rising from 445 a week ago, while the official rate was 424. Sudan sharply devalued its currency in February, moving to a flexible managed float system, which the auctions are designed to support.

Sudan's central bank allocated $43.4 million in its second foreign currency auction, an almost three-fold increase on the previous week, while the difference between the country's official and black market exchange rates continued to widen. A dollar fetched 470 Sudanese pounds on the black market, rising from 445 a week ago, while the official rate was 424.

Sudan sharply devalued its currency in February, moving to a flexible managed float system, which the auctions are designed to support. However, the auctions, which represent the first time in years that Sudan's central bank has supplied dollars to commercial banks, have not slowed the decline of the pound on the black market for which traders have not specified a specific cause.

"Some parties have sought during the past few days to spread incorrect and harmful news about the foreign exchange rate with the aim of thwarting the exchange rate unification policy," said the Sudan Banks Union in a statement on Tuesday. Sudan's money supply surged 60% in February, central bank figures showed.

Some 29 banks participated in the auction, in which 184 applications were accepted out of 277, at rates of between 386 and 425 Sudanese pounds to the dollar, the central bank said. The auction was limited to importers who required dollars to import goods on an official list of essential goods that includes medicines, tea, and agricultural and industrial inputs.

The central bank also announced a third auction in a separate statement on Tuesday, to be held on June 6.

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