Sudan removes customs exchange rate – Ministry of Finance

Vehicles line up for gasoline at a gas station in Khartoum, Sudan, May 4, 2019. REUTERS / Umit Bektas

KHARTOUM, June 22 (Reuters) – Sudan has removed its customs exchange rate, used to calculate import duties, as the final step in a devaluation of its local currency, the finance ministry said on Tuesday.

It also represents the last major step in an accelerated reform program followed by the IMF that the country is pursuing in order to benefit from debt relief and attract new financing.

Earlier this month, Sudan completely removed subsidies on gasoline and diesel from cars, and in February it devalued its currency and began a flexible managed float policy.

The customs exchange rate, last set at 20 Sudanese pounds to the dollar, was used to value imports in order to calculate duties. On Tuesday, the official Sudanese pound rate was 438 pounds to the dollar, while the black market rate was around 465.

The reforms have been blamed for the rise in prices, with inflation in May reaching 379%. Prices of imported cars had risen in recent days in anticipation of the decision.

“We reassure citizens that this policy will not increase the prices of imported basic products (…) nor those of agricultural or industrial inputs,” the ministry said.

He cut tariffs across the board and even to zero for some needed products, he said.

“We have undertaken a product-by-product review,” a ministry official told Reuters, noting that the price of an essential product like cooking oil has dropped from 40% to 3%, while the effect of the policy would increase the price of some non-essential products.

The ministry said the corporate income tax had been removed and additional fees levied by the government had been reduced.

When Sudan devalued the currency in February, officials said some imports would be restricted in order to fill the country’s large trade deficit.

Sudan continued its reforms to alleviate most of its debt of at least $ 50 billion through the Heavily Indebted Poor Countries (HIPC) program. The IMF’s executive board will decide whether Sudan reached the program “decision point” on June 28.

Reporting by Khalid Abdelaziz, written by Nafisa Eltahir Editing by Gareth Jones

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