The Central Bank of Sudan announced through circular (sent to Sudanese banks last Thursday) that starting from 2008 it will be denominating all currency accounting in euro instead of U.S. dollar.
Central bank also informed other national banks that they are advised to stop using dollars and move to euro too. In their opinion, it should help protecting the Sudanese economy from the weakening U.S. dollar.
The recommendation doesn’t imply that the bank should stick strictly to euro, it rather suggests moving to any other currency except U.S. dollar. This would be a well timed measure a year or two ago, but in front of the very possible dollar appreciation against euro in 2008, it was a surprising step.
Banks were also advised to recommend their private account holders transfer their dollar currency assets to other currencies, explaining the possible risks of keeping accounts in the U.S. currency.
Although economy of Sudan doesn’t hold as many dollars as some of more developed oil exporting countries, this transfer can prove to be harmful for USD in a medium term.
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