October 14, 2018 / 7:37 AM / 9 months ago

UPDATE 2-Sudanese pound strengthens for first time since devaluation

(Updates with black market rate and other details)

By Khalid Abdelaziz

KHARTOUM, Oct 14 (Reuters) - The Sudanese pound strengthened to 46.95 to the U.S. dollar on Sunday, bankers said, in the currency’s first rise since its steep devaluation a week ago when the government introduced a new mechanism to combat a financial crisis.

Sudan has been reeling from an acute shortage of foreign currency and an increasingly expensive black market for dollars that has sapped its ability to import and caused prices to soar, kindling unrest in some areas earlier this year.

A newly established team of bank executives and exchange houses tasked with setting the daily exchange rate kept the pound steady at 47.5 to the dollar throughout last week. This compares to a pre-devaluation official rate of around 29 pounds to the dollar.

The Sudanese pound also strengthened slightly on the black market on Sunday, traders said. The buying rate stood at 48 pounds against the dollar while the selling rate was at 49 pounds to the dollar on Sunday. The rates on Thursday were 50 and 51 pounds to the dollar.

The pound’s rise came after the central bank began on Saturday pumping cash into local banks to enable them to buy foreign currency from the public.

Central bank governor Mohamed Kheir al-Zubeir said the treasury was ready to provide any amount of Sudanese pounds to local banks to buy any amount of foreign currency that may become available.

On Sunday, the first day of the working week in Sudan, queues at ATMs were shorter in central Khartoum than they had been on Thursday, the last day before the weekend, according to a Reuters witness. People continued to face difficulties in cashing large cheques at banks.

Abdel Hamid Jamil, who heads the team tasked with setting the exchange rate, said their decisions were guided by the indicators on any given day and after consultations. (Reporting by Khalid Abdelaziz; Writing by Sami Aboudi and Yousef Saba; Editing by Patrick Werr, Jason Neely and Raissa Kasolowsky)

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