VZCZCXRO4976
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 
 
 
¶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