The governor of Sudan's central bank Mohamed Kheir al-Zubeir said on Monday that his country has enough foreign exchange reserves to cover around five months of imports contrary to figures released last week by the International Monetary Fund (IMF).
"It's very difficult now, it is around four to five months of imports," al-Zubeir told Reuters when asked about foreign currency reserves. "Four months is low but we hope that after this agreement (with South Sudan), the reserves will increase drastically," he said on the sidelines of a conference in Kuwait.
The IMF reported in its annual review of the Sudanese economy that Khartoum's Forex reserves will drop from $1.3 billion in 2011 to $1.1 billion in 2012 before rising slightly to $1.2 billion in 2013. These levels are enough to cover a little under two months of imports according to IMF calculations. The governor - in line with a long standing policy - declined to say what Sudan's Forex reserves are but revealed that their goal is to make them sufficient to fund imports for six to seven months.
A year ago, Al-Zubeir called on Arab states to provide up to $4 billion in deposits to shore up the country's foreign exchange reserves. He forecasted the Sudanese pound to appreciate against the dollar following an oil deal signed with South Sudan last month.
"Definitely the Sudanese pound exchange rate is going to stabilize," Al-Zubeir said. "We are taking of course measures to stabilize [the pound]," he said, without elaborating. Sudanese authorities have failed in their persistent efforts to protect the value of the pound against foreign currencies particularly since the oil-rich south became an independent state in July 2011.
Landlocked South Sudan shut down its oil earlier this year denying Khartoum billions of dollars in transit fees. The recent agreement will provide for resumption of oil exports by Juba in the coming months. In a related issue, Sudan's ruling National Congress Party (NCP) expressed confidence today that the country's external debt would be cancelled following last month's deal between Khartoum and Juba.
The NCP's spokesperson Badr Al-Deen Ibrahim said in press statements that "new dynamics" will compel creditors to proceed with debt relief adding that donors' position in the south was due to their bias in favor of South Sudan. The IMF estimated that Sudan's external have grown by 27% since 2008 from $32.6 billion to $41.4 billion in 2011.
The IMF projected debt levels to reach $43.7 billion in 2012 and $45.6 billion in 2013. The latter represents 83% of Sudan's 2011 GDP number of $55.1 billion. Sudan's foreign minister Ali Karti in his speech before the UN General Assembly accused the international community of reneging on pledges of cancelling debt made following the signing of the 2005 Comprehensive Peace Agreement (CPA) between north and south Sudan. North and South Sudan agreed last month to work jointly on seeking debt relief from international creditors. If these efforts are unsuccessful the ex-foes will sit down again to decide on how to split the debt.