CBoS Reverses Export Proceeds Regulation Amendment as Exporters Criticize Move

Sudanhorizon – Nazik Shamam

The Central Bank of Sudan has reversed a previous circular that required banks to purchase export proceeds at the banks’ own exchange rate rather than the rate set by the central bank.

In a circular issued on Wednesday, a copy of which was obtained by Sudanhorizon, the Central Bank allowed banks to purchase export proceeds at their own announced exchange rate, but only for export transactions financed by those banks.

The central bank also required banks to apply its designated exchange rate to import transactions and to other export proceeds not financed by banks.

According to the circular, the measure is part of the Central Bank of Sudan’s ongoing efforts to regulate and control monetary and banking transactions and support financial market stability.

Exporters, however, criticized the move, describing it as a major setback to policies supporting exports and as an incentive for the import sector at the expense of exports.

Ahmed Al-Tayeb Al-Anan, head of the Gum Arabic Exporters Division, explained that the Central Bank had previously issued a circular allowing banks to purchase export proceeds at their own announced rate instead of the rate set by the central bank. Under that arrangement, export proceeds were purchased at SDG 1,200 per dirham, the rate applied to sales to importers.

Speaking to Sudanhorizon, Al-Anan said the new measure represents a blow to the export sector and provides support to imports.

He said that “following protests by exporters and banks, the Central Bank issued a circular yesterday allowing the purchase of export proceeds at the exchange rate adopted by bank exchange offices.”

“But today, the Central Bank reversed its policy and restricted yesterday’s circular to proceeds from bank-financed exports only, which will be handled at the exchange-office rate. Export proceeds financed directly by exporters themselves will remain subject to the earlier decision and will be purchased at SDG 1,200 per dirham,” he added.

Shortlink: https://sudanhorizon.com/?p=16933