Identifier
Created
Classification
Origin
07KHARTOUM209
2007-02-12 14:58:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Khartoum
Cable title:
RESPONSE TO PLAN B - SUDAN MOVING TO REPLACE THE
how-toVZCZCXRO4976 OO RUEHGI RUEHMA RUEHROV DE RUEHKH #0209 0431458 ZNR UUUUU ZZH O 121458Z FEB 07 FM AMEMBASSY KHARTOUM TO RUEHC/SECSTATE WASHDC IMMEDIATE 6099 INFO RUCNFUR/DARFUR COLLECTIVE PRIORITY RUCPDOC/USDOC WASHDC PRIORITY
UNCLAS KHARTOUM 000209
SIPDIS
SENSITIVE
SIPDIS
DEPARTMENT FOR AF/SPG AND EEB/OFD/OMA
PLEASE PASS TO USAID FOR AFR
E.O. 12958: N/A
TAGS: EFIN EPET ETRD ECON US SU
SUBJECT: RESPONSE TO PLAN B - SUDAN MOVING TO REPLACE THE
DOLLAR FOR TRADE
UNCLAS KHARTOUM 000209
SIPDIS
SENSITIVE
SIPDIS
DEPARTMENT FOR AF/SPG AND EEB/OFD/OMA
PLEASE PASS TO USAID FOR AFR
E.O. 12958: N/A
TAGS: EFIN EPET ETRD ECON US SU
SUBJECT: RESPONSE TO PLAN B - SUDAN MOVING TO REPLACE THE
DOLLAR FOR TRADE
1. (U) The Central Bank of Sudan is taking steps to use
currencies other than the U.S. Dollar for commercial
transactions. On February 12, the Bank announced it has
approved the use of some Asian currencies in settlement of
commercial transactions. Sudan's most important source of
foreign exchange is the export of oil, primarily to Asian
countries, including China, Malaysia and India. The decision
to try to replace the dollar with Asian currencies follows
from Sudan's trade patterns.
2. (U) This comes at the same time as the Ministry of
Foreign Affairs stated that intensified U.S. economic
sanctions, so called Plan B, are an "unjustifiable escalation
of existing tensions" between the two countries. The
spokesman for the Ministry said that U.S. sanctions would
obstruc th Naivasha Peace Agreement, as sanctions would
negatively affect the oil revenues that are being shared with
the south in accordance with the peace agreement.
3. (SBU) According to the manager of Byblos bank, the
Governor of the Central Bank suggested to commercial bankers
at a monthly meeting last week that they consider undertaking
transactions in Asian currencies, especially the yen, and in
Euros. The intention being to reduce exposure to a potential
freeze in dollar based transactions. The Byblos manager
speculated that a freeze in dollar based transactions could
lead to increased volume of transfers of dollars through
alternative means such as "hawalas". It might provide
opportunities for money laundering and increased
opportunities fo organized crime, he said.
4. (SBU) Econ officer spoke to local IMF representative, who
noted that moving away from the dollar completely would be
difficult for Sudan, as the Sudanese Dinar is effectively
pegged to the dollar and reserves are maintained primarily in
dollars, with some holdings of Euros. Even loans from China
are denominated in dollars. IMF rep noted that the worldwide
trend is for Central Banks to reduce dollar reserves and
increase reserves of other currencies, especially Euros.
HUME
SIPDIS
SENSITIVE
SIPDIS
DEPARTMENT FOR AF/SPG AND EEB/OFD/OMA
PLEASE PASS TO USAID FOR AFR
E.O. 12958: N/A
TAGS: EFIN EPET ETRD ECON US SU
SUBJECT: RESPONSE TO PLAN B - SUDAN MOVING TO REPLACE THE
DOLLAR FOR TRADE
1. (U) The Central Bank of Sudan is taking steps to use
currencies other than the U.S. Dollar for commercial
transactions. On February 12, the Bank announced it has
approved the use of some Asian currencies in settlement of
commercial transactions. Sudan's most important source of
foreign exchange is the export of oil, primarily to Asian
countries, including China, Malaysia and India. The decision
to try to replace the dollar with Asian currencies follows
from Sudan's trade patterns.
2. (U) This comes at the same time as the Ministry of
Foreign Affairs stated that intensified U.S. economic
sanctions, so called Plan B, are an "unjustifiable escalation
of existing tensions" between the two countries. The
spokesman for the Ministry said that U.S. sanctions would
obstruc th Naivasha Peace Agreement, as sanctions would
negatively affect the oil revenues that are being shared with
the south in accordance with the peace agreement.
3. (SBU) According to the manager of Byblos bank, the
Governor of the Central Bank suggested to commercial bankers
at a monthly meeting last week that they consider undertaking
transactions in Asian currencies, especially the yen, and in
Euros. The intention being to reduce exposure to a potential
freeze in dollar based transactions. The Byblos manager
speculated that a freeze in dollar based transactions could
lead to increased volume of transfers of dollars through
alternative means such as "hawalas". It might provide
opportunities for money laundering and increased
opportunities fo organized crime, he said.
4. (SBU) Econ officer spoke to local IMF representative, who
noted that moving away from the dollar completely would be
difficult for Sudan, as the Sudanese Dinar is effectively
pegged to the dollar and reserves are maintained primarily in
dollars, with some holdings of Euros. Even loans from China
are denominated in dollars. IMF rep noted that the worldwide
trend is for Central Banks to reduce dollar reserves and
increase reserves of other currencies, especially Euros.
HUME