Exchanges Facing Problems Competing Parallel Markets
Khartoum - The amount allocated for obtaining foreign currency per an individual has but cut due to suspicious business by some traders to send many people abroad in order to supply the black market dealers with needed hard currencies, the General Secretary of Exchanges Union, Jaafer Abdu has explained.
He said that travelers to Egypt will get $500 dollars instead of $100 dollars, adding the exchanges’ transactions are affected by the parallel market. He said that suck market is controlled by certain tribes and families.
Abdu went on to say that these tribes and families bequeath it to their sons and daughters, adding that they are in monopoly and control of affairs because of their experience and being well off.
The amount of foreign currency has decreased over the period 2009-2010, thus has affected exchanges transactions and contributed to increasing the US dollar rate by 80% due exodus of oil revenues and as the result exodus of some resources from the Central Bank of Sudan, which has made it difficult for attracting money from abroad, the secretary general said.
He said that foreign currency market has moved abroad, namely Saudi Arabia, Dubai. However, he noted that some of individuals owning private financial institutions and exchanges abroad are doing business in accordance with applicable laws, adding that the exchanges are involved in internal transfer service not exceeding 2 hundred percent. Abdu said that the Central Bank of Sudan connected solving the problems after tripartite program.
He assured that the Union has proposed some suggestions to control the problem, mainly balancing between formal dollar rate and the rate parallel market; beside incentives for expatriates via increasing the formal rate of dollar.
He stated that the exchanges are operating in accordance with regulations issued by the Central Bank, adding that they are mandated to purchase and sell currencies at rates set by the Bank, in addition to express transfers. “Every exchange purchases an amount $150,000 dollars from the Central Bank to sell it seeking foreign currencies for different purposes.”
The representative of foreign relations at Exports Development Bank, Shakir Ibrahim attributed transferring money via cell phone to increasing transfer commissions via companies; in addition to the lack of transparency regarding transfer cost. He added that financial institutions have difficulty accessing rural areas. Shakir warned of risks of transfer via mobile phones, which considers insecure, especially regarding loss of money as many SIM cards are not registered with telecommunication operators.
He hinted at exploiting such form of transfer in money laundering. “We don’t know how much money is transferred via mobile phones,” he said, indicating that the size of currency market has grown across the globe, adding the market is monopolized by certain companies and institutions.
There is no longer foreign currency market in Sudan after the Islamization the banking system. Shakir said the Central Bank has resorted to dividing the banks into groups, but the idea has fell short due poor performance by some bank.
He said that the policies of Central Bank for relying euro as alternative to the U.S dollar has failed, especially following the current Euro Zone crisis, warning against depending on the euro, and rather recommended seeking other alternatives.
By Haram Hashim Ali, 03/04/2012