SUDAN REJECTS IMF DEMAND FOR DEVALUATION

  Sudan has rejected a demand by the
  International Monetary Fund for a currency devaluation because
  such a move would have a negative impact on its economy, the
  official Sudan News Agency (SUNA) reported.
      Finance Minister Beshir Omer, quoted by SUNA, said his
  government also rejected an IMF demand to lift state subsidies
  on basic consumer goods.
      SUNA, monitored by the British Broadcasting Corporation,
  said Omer made the remarks after a meeting in Khartoum
  yesterday with IMF envoy Abdel-Shakour Shaalan.
      Sudan, burdened by a foreign debt of 10.6 billion dlrs, is
  some 500 mln dlrs in arrears to the IMF, which declared it
  ineligible for fresh loans in February last year.
      In February 1985, Sudan announced a 48 pct devaluation of
  its pound against the dollar, adjusting the official exchange
  rate to 2.5 pounds to the U.S. Currency.
      Since then, it has resisted pressure from main creditors
  for more currency adjustments, arguing that past devaluations
  had failed to boost exports but raised local consumer prices.
  Sudan also has an incentive rate of four pounds to the dollar
  for foreign visitors and remittances by expatriate workers.
      Dealers in Khartoum's thriving black market said the dollar
  was sold at 5.5 pounds today.
      With stringent import regulations and the government
  increasingly short of foreign currency, black market dollars
  are used to finance smuggled imports from neighbouring
  countries, mainly Egypt, Kenya, Ethiopia and Zaire.
      Western diplomats in Khartoum say the meetings between IMF
  and Sudanese government officials do not amount to formal
  talks, but rather an effort by the IMF to monitor Sudan's
  economic performance.
      The diplomats said Sudan hoped a planned four-year economic
  recovery program would be acceptable to the IMF as a serious
  attempt to tackle the country's economic troubles and persuade
  its Gulf Arab creditors to pay the IMF arrears.
      This, they said, could provide Sudan with a clean bill of
  health from the IMF that it could take to Western government
  creditors, grouped informally in the so-called Paris Club, to
  reschedule debt payments.
      Twenty-three pct of Sudan's total foreign debt is owed to
  members of the Paris Club, the diplomats said.
      Sudan's Finance Minister said last month the country's IMF
  representative had told him the fund's executive board was "very
  pleased with the 18.5 mln dlrs arrears we have paid in the past
  couple of months."
      The representative, Omer Said, said IMF Managing Director
  Michel Camdessus said he would ask Saudi Arabia, to which Sudan
  owes about 1.4 billion dlrs, to help Khartoum to pay more.
      Sudan has an annual debt liability of nearly 900 mln dlrs
  but set aside only some 200 mln dlrs to service debts in the
  fiscal year ending next June 30.
  

