Sudan Central Bank denies depriving south of hard cash
Wed Aug 25, 2010 5:00am GMT
KHARTOUM (Reuters) - Sudan's Central Bank denied on on Tuesday it had paid the south Sudan government its share of oil revenue in local currency, a move the south says sparked a foreign exchange crisis months before a vote on independence.
Under the 2005 peace deal that ended Africa's longest civil war, the south receives about half of Sudan's oil revenues. Most of Sudan's 6 billion barrels of oil reserves lie in the south, but the north has the ports and refineries.
South Sudan's finance minister said on Monday that Khartoum had sent the oil payments in Sudanese pounds rather than hard currency, calling the move a "sinister" ploy to unsettle the south's economy ahead of a Jan 9 vote on whether the south should secede from the north.
"It has never once happened since the signing of the peace deal in 2005 that the south's share of oil revenues was transferred in Sudanese pounds," Central Bank Governor Sabir Hassan told reporters on Tuesday.
The southern government said its foreign exchange reserves were drying up as a result of receiving its oil payments in local currency and investor confidence was being eroded.
Hassan said the southern government was trying to cover up its own mistakes by accusing the north of giving them only Sudanese pounds.
"The southern government prevented the Bank of Southern Sudan from implementing the Central Bank's directives to release hard currency into the markets to protect the exchange rate of the Sudanese pound," he said, adding the government had also demanded hard currency from the bank without replacing it.
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