Sudanese banks are taking the first steps towards ending two decades of isolation

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Sudanese banks have begun steps to re-establish relationships with foreign banks, while the United States prepares to remove Sudan from its list of countries that sponsor terrorism.

Bankers and analysts say the process is likely to be slow.

Restoring international banking relations could give vital support to an economy still in crisis after more than 18 months of political transition following the ouster of former President Omar al-Bashir.

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Banks have been banned from correspondent relationships that include US dollars and have had difficulty dealing in other major currencies for nearly twenty years, which forces them to rely primarily on the UAE dirham for transactions.

Importers depend on brokers with high costs, mainly in Dubai, to obtain foreign currencies, which means an additional cost for local consumers and helps exacerbate inflation, which is currently at 220 percent.

On October 27, Al-Rasheed Abdel-Rahman, general manager of the Sudanese Al-Baraka Bank, said that the bank had completed the first dollar-denominated cash transfer in years to Sudan, as it brought in dollars from New York through its brother Al-Baraka Bank Egypt, which is based in Cairo.

Al-Rasheed Abdul Rahman Ali added that the transfer, which is a Sudanese trading company, was the first in nearly 20 years.

Most of the major foreign banks began to withdraw gradually since 2000, as the United States cracked down on dealings with Khartoum.

Washington formally lifted economic sanctions on Sudan in 2017, but continued to designate it as a state sponsor of terrorism, partly due to its suppression of the rebellion in Darfur.

Foreign banks are awaiting the removal of the country from the list of states sponsoring terrorism before re-establishing banking relationships, as they are concerned that they may be subject to secondary penalties existing against individuals with links to the Darfur war.

A government of experts working under a governing council that includes both military and civilians has made unremitting efforts to remove Sudan from the list since last year.

On October 20, US President Donald Trump announced his decision to remove Sudan from the list of state sponsors of terrorism while seeking to push the country to agree to normalizing relations with Israel, and later sent the decision to Congress, which has 45 days to approve or reject it.

Bankers hope that an initial agreement signed by Sudan with General Electric in October to support electricity generation will stimulate at least some US banks to speed up the process.

Under the agreement, GE agreed to rapidly construct mobile turbines and rehabilitate existing power stations to increase electricity generation by up to 470 megawatts.

Source: Reuters





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