Sudan names new central bank governor to take on crisis

CAIRO (Reuters) - Sudan has named a new central bank governor to take on its financial crisis and hard currency shortage, the latest sign of an overhaul of senior posts seen as favouring loyalists of President Omar Hassan al-Bashir.

The economy has been in turmoil since South Sudan seceded in 2011, taking with it about three-quarters of the country's oil reserves - the main source of government revenues and the dollars needed for food and other vital imports.

Abdel Rahman Hassan took on the job after heading state-run Omdurman National Bank since 2006, state news agency Suna reported on Sunday.

"Hassan was not chosen for his strong views or extraordinary competence. He was chosen because he is trusted," said Harry Verhoeven, an Oxford University professor and expert on Sudan.

"I don't think he would change all that much. It's to be seen as part of the general reshuffle in which the president tries to balance a need for new faces and some kind of reform and on other hand a safe pair of hands. He ticks that box very well," Verhoeven added.

Earlier this month, Bashir named Lieutenant General Bakri Hassan Saleh - a close ally who helped him stage his 1989 coup and crush many rebellions - as first vice president, replacing veteran Islamist Ali Osman Taha.

Analysts said the change showed the desire of Bashir, himself a former army officer, to turn to more trusted allies in the military.

"He (Hassan) is an Islamist and likes to implement Islamic banking rules," said one former colleague who asked not to be named.

"He also has a strong relationship with army officials as the Omdurman National Bank is partly owned by the military," the ex-colleague added.

In September the government lifted most fuel subsidies to help overcome a budget crisis. The move doubled pump prices overnight and triggered violent protests in which dozens of people were killed and more than 700 people arrested.

The central bank devalued the Sudanese pound by 22.6 percent against the dollar in November, the second such move in just over a year.

The scarcity of dollars had become so bad that the central bank had started using up the general reserves of commercial banks, which are meant to be kept as deposits with the central bank, a financial source has told Reuters.

Hassan replaces former finance minister Mohamed Khair al-Zubair who served as central bank governor since 2011. Both are members of Bashir's ruling National Congress Party

(Reporting by Omar Fahmy, Asma Alsharif and Shadia Nasralla in Cairo and Khaled Abdel Aziz in Khartoum, writing by Yasmine Saleh)