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Forex bureaus in Sudan hike exchange rate to curb black market - Sudan Tribune
June 11, 2012 (KHARTOUM) – Forex Bureaus in Sudan on Monday started using higher exchange rates for the US dollar in a bid to match its value in the black market and prevent further depreciation of the local currency.
Last month the Central Bank of Sudan (CBS) made a bold effort to curb the thriving black market by allowing Forex bureaus to buy and sell currencies using their own exchange rates as opposed to the official one.
The effort is hoped to bridge the huge gap between the official exchange rate and that used in the black market, where the US dollar continues to trade for twice the official rate of 2.7 Sudanese pounds despite multiple interventions by the central bank to inject hard currency.
Last week the Sudanese pound hit an all-time low of 5.55 in the black market as the central bank failed to supply Forex bureaus with enough hard currency to meet demands.
The secretary-general of the Forex Bureaus Union (FBU), Abdel Al-Moniem Nur Al-Deen, on Monday said that Forex bureaus had decided to hike their exchange rate to 5.53 pounds in the hope of greater proximity to the black market rate.
Nur Al-Deen justified their decision by saying that they had realized that the daily fixed quota of 3,500 USD allocated to Forex Bureaus by the central bank had been leaking to the black market through some traders who present fake travel documents in order to get dollars at the official rate then sell them back in the black market.
The FBU previously announced that some citizens applying for hard currency on travelling justifications have had their requests turned down after it was discovered that they were put up to it by black market traders who buy their dollars to sell them later at a higher rate.
Sudan has been struggling to contain the deteriorating value of its own currency as the flow of hard currency was sharply curtailed following the secession of the oil-rich South Sudan last year.
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Forex Flash: Hollande between deficit target and growth pledges – ING Bank - NASDAQ
FXstreet.com (Barcelona) - The French President Hollande is the favorite candidate to win the 17 June second round of Parliamentary elections. The socialists could obtain a clear majority of between 305 and 350 seats (of a total of 577 seats), which would ease the President's work to implement his measures in France and his views in Europe.
However, with falling manufacturing output by -1.4% in April and business confidence to 93, ING Bank analysts see hard times ahead with low chances of reaching 0.5% GDP growth in 2012. Hollande will face a dilemma between promoting his growth strategy, increasing spending and hire more public workers, while targeting the 3% line of public deficit in 2013. One must give in.
"It may be very difficult for France to reach a public deficit of 3% in 2013 without new austerity measures and a cut in public expenditures, which is contrary to François Hollande's election pledges", wrote Manuel Maleki, analyst at ING Bank.
Scottish independence: SNP denies financial plan U-turn - BBC News
The Scottish government has denied performing a policy U-turn by asking UK regulators to oversee Scots banks in an independent Scotland.
The opposition said the move came following the SNP's previous criticism of UK industry controls on Scotland.
But a spokesman for First Minister Alex Salmond said the policy had now simply been "defined".
Scottish Finance Secretary John Swinney laid out his position during a speech in Glasgow on Monday evening.
He underlined a plan to keep a "sterling zone" and the UK regulatory framework, if the Scottish electorate voted for independence in the referendum, expected to take place in autumn 2014.
Addressing a business audience, Mr Swinney said a sterling zone would provide businesses in Scotland and the rest of the UK with the "certainty and stability for trade, investment and growth".
He added: "As the Bank of England takes on the role of regulator for UK financial services - a very sensible and long overdue position - retaining the pound will preserve the highly integrated UK financial services market.
"That framework is solid and substantial and I know that understanding our proposal is important to many of you in making your decisions about Scotland's future."
This is difficult stuff for SNP ministers.
Their rhetoric about the financial crisis has been about failed regulation from London being more significant than the failings of bankers in Scotland.
And even if John Swinney thinks the coalition government's reforms are welcome, it still looks like regulation from London.
And from London, it looks a bit presumptions that a Scottish government can assume the protection of institutions based in London.
But the nationalist view is that the Bank of England, being a central bank for the whole of the United Kingdom, is not the creature of Whitehall or of the rest of the UK, but of Scotland as well.
Likewise, the pound sterling is "as much Scotland's currency as it is the currency of England and Wales".
SNP policy favours an independent Scotland joining the Euro, pending a referendum, but the current economic conditions means the option is not currently attractive.
Ministers also said the Bank of England would continue to oversee monetary policy and set interest rates, but an independent Scotland could have a seat on its Monetary Policy Committee, or have a role in appointments.
Labour said the SNP had previously talked about an independent Scotland having its own financial watchdog and had pledged "light-touch regulation".
Scottish Labour leader Johann Lamont, said: "The SNP are making this up as they go along.
"The bank regulators they blamed for the collapse of the banking system are now the people they want to be in charge of the banking system. They reject the UK but want to keep George Osborne in charge of the banks?
"The truth is they know the people of Scotland reject leaving the UK, so they are now performing contortions on policy to make leaving the UK seem like remaining in it."
When asked what the point of independence would be if the SNP favoured keeping the pound and subscribe to London-based financial regulation, the spokesman for Mr Salmond said there was a "fundamental distinction" between monetary policy and fiscal policy.
He explained: "What fiscal policy provides you with is the levers of economic power in order to boost economic growth and increase employment in Scotland.
"No Westminster government has control over interest rates and has not done so since 1997, so, in that sense, it would be exactly the same as for successive Westminster governments."
The spokesman said independence would provide Scotland with a "strong voice" in Europe, adding: "Independence is the only constitutional policy which can ensure that we have the ability to remove trident nuclear weapons from the river Clyde - devo max doesn't provide that power.
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End Quote Sir Howard DaviesI don't quite know how you can be a servant of two masters, in terms of two separate treasuries and one central bank”
"Independence is the only constitutional option which can ensure that Scotland decides which military activities we are involved in in order that never again can Scotland be dragged into an illegal war such as Iraq."
The comments came as Sir Howard Davies, a former head of the Financial Services Authority, told BBC Radio's Good Morning Scotland programme that the SNP position to keep a central Bank of England and the pound was unclear.
He said: "It's not obvious quite how a system with two separate finance ministries and one central bank would work.
"Supposing the Bank of England looked again at a Scottish bank and said, 'it's really in trouble, people would want it to be rescued, but we're not going to rescue it unless we're indemnified', where would they look for that indemnity?
"It wouldn't be the UK Treasury, presumably the English Treasury - it would have to be the Scottish Treasury.
"I don't quite know how you can be a servant of two masters, in terms of two separate treasuries and one central bank. I can't think of an analogy where that's the case."
The Scottish government said it supported a key recommendation of the Vickers report into banking reform to remove the taxpayer from having to bail out troubled institutions in future.
Responding to Sir Howard's point, Scotland's deputy first minister, Nicola Sturgeon, said in the event of a Scottish bailout being needed: "The Scottish government, in that scenario, would pay the Bank of England to provide lender of last resort facilities for Scottish banks.
"The Scottish government has made clear, the SNP's made clear, that an independent Scotland would remain within sterling."
A Treasury spokesman said the Scottish government's proposals remained "totally unclear".
The spokesman said: "If they are proposing a full monetary union with Sterling, then the Eurozone crisis shows that strong control of monetary policy, fiscal policy and borrowing would have to be agreed with the UK government and exercised centrally.
"This includes the role of the Bank of England and the conduct of macro-prudential regulation.
"If they are proposing an independent Scotland using the pound but without a formal monetary union, the presumption is that the Bank of England would not be required to act as lender of last resort or take account of the Scottish economy when setting monetary policy."
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