November 7, 2017 / 2:28 PM / 12 days ago

Sudan's currency weakens against dollar on black market

KHARTOUM, Nov 7 (Reuters) - The Sudanese pound weakened on the black market on Tuesday to 23.5 pounds to the U.S. dollar from about 22 pounds earlier this week, currency traders said, as importers’ demand for dollars spiked following the U.S. decision last month to lift trade sanctions.

“Companies and traders ... want to increase their imports after the U.S lifted the sanctions and the banks do not have dollars, so they come to us,” one black market trader said.

The import-dependent country has suffered both from the sanctions and from the secession of the south in 2011, when it lost three-quarters of its oil output, its main source of foreign currency.

The central bank holds the official exchange rate at 6.7 pounds to the dollar.

The cheap pound contributed to surging inflation, which reached 35.13 percent in September year-on-year, up from 34.61 percent in August, according to the Central Statistics Office.

The decision to suspend 20-year sanctions and lift a trade embargo, unfreeze assets and remove financial restrictions came after a U.S. assessment that Sudan had made progress on counter terrorism cooperation and on long-standing internal conflicts such as in Darfur. (Reporting by Khalid Abdelaziz, writng by Amina Ismail; Editing by Richard Balmforth)

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