Sudan asks exporters to repay dollar gains quicker

Sudan's central bank said on Tuesday export traders needed to repay foreign currency gains within three months instead of six, the latest measure to fight a scarcity of dollars driving up inflation.

The African country is fighting a severe economic crisis since losing much of the country's oil revenues to South Sudan when it became independent on July 9. Khartoum witnessed two small protests against high food costs last week.

Annual inflation was 21 percent in August as the costs for food -- much of it imported -- jumped. At the same time the Sudanese pound has slid on the key black market as foreign currency inflows fall with the loss of oil revenues.

On Tuesday, the central bank said export traders needed to repay foreign currency gains made under some credit facilities within three months instead of previously six.

To fund exports traders can obtain dollars with a letter of credit under the condition that they return the hard currency but a trader said some businessmen had exploited the rules for currency speculation.

On the black market, the pound had recovered some ground in recent days after authorities sought to clamp down on dealers, traders said.

Dealers said a dollar bought 4 pounds compared to 4-4.8 a week ago. This is still well above the official rate of around 3.

The decline of the dollar is the result of pressure security put on the black market, said one trader in the capital. But there is still a shortage of dollars.

The central bank also said it had provided banks with 74 million dollars to increase the hard currency allowance for Muslims doing the annual pilgrimage in November.

The government has launched a package of counter-measures such as temporarily waiving duties for 12 basic food items.

The central bank has also asked fellow Arab states to put deposits in the central bank and commercial lenders to help the economy.

Sudan is trying to diversify its economy to cut its exposure to oil costs by boosting mineral exports and the agricultural sector, but progress has been slow which experts blame on bad planning and a U.S. trade embargo.