Africa

Sudan launches a new currency, following South Sudan

  • 24 July 2011
  • From the section Africa
People count the old currency before receiving the new Sudanese currency at a branch of the central bank of Sudan in Khartoum
Changing currency, the latest element in the gradual separation of North and South Sudan

Sudan has officially introduced a new currency.

The new notes are available in banks and currency exchange points all over Sudan, according to the Central Bank.

The move is a response to South Sudan, which seceded two weeks ago, launching its own currency.

Both economies are likely to suffer, as financial arrangements between the two states are part of several outstanding issues.

The Central Bank hopes all the old notes will have been replaced within three months, but at this point this is not a hard deadline.

The Bank says the new currency is being introduced as a 'precautionary measure', since South Sudan has already brought in its own new currency.

It is estimated up to 2bn Sudanese pounds are in circulation in the new country, which has the potential to destabilise Sudan's economy.

Further talks with the authorities in Juba over over old notes in the South are not ruled out.

'Currency wars'

"We will undertake all precautionary measures to protect the Sudanese economy, and I hope that we will reach an satisfactory agreement for both sides regarding the pound circulating in the South," deputy governor Badr al-Din Mahmoud said in a statement.

The Sudanese authorities are careful to say they do not want a "currency war" but this looks to be exactly what is happening.

Analysts say both economies could face real difficulties if there is no co-ordination between them.

The governments in Juba and Khartoum also have to come to an agreement over oil.

Most of it is in the South, but the infrastructures to export it are in Sudan.

The two sides cannot agree on how much South Sudan should pay to use these facilities.

The financial squabbles highlight the tensions which are likely to complicate life in both countries for the foreseeable future.

Around the BBC

Related Internet links

The BBC is not responsible for the content of external Internet sites