International Finance in Strategic Operations
Prepare a paper on the possibility of entrance into the Sudanese
Market. Based on the summary below, please answer the following
Exposition for the individual paper:
Sudan has found deposits of oil and Boron in the extreme southwest
of the Bahr Al Ghazal region, near the Central African Republic and
Congolese borders. The new Sudanese government has decided to send
the exploration rights out to bid. ExxonMobil bid and won the
rights to exploit Sudan’s newly discovered natural resources. The
President of the oil exploration SBU has given you the task to
determine the feasibility of operating in Sudan.
A. Using this week’s readings, illustrate the shape of Sudan’s
capital markets by answering the following questions:
1) Describe the financial system.
a. Is Sudan’s monetary policy
a pegged or crawling system, managed or
independent float, fixed-rate or target-zone arrangement?
b. What are Sudan’s Current
account, capital account, and balance of
payments with developed countries or regions such as the United
Germany, Japan, England, NAFTA countries, or Saudi Arabia? Please
two developed countries and/or regional trade blocks.
c. Who is Sudan’s major
trading partners, and what is Sudan’s Current
Account relationship with them? Is it negative, positive, or
Describe briefly what a positive, negative, and neutral current
balance between Sudan and its major trading partners mean. (If
than two, just choose the top two countries.)
d. What is Sudan’s
relationship to international financial institutions such
World Bank, World Trade Organization, International Monetary
UN, and/or UNESCO? Is it positive, negative or neutral?
describe what a positive, negative and neutral relationship would
between a developing country and any two international
2) According to Chapter 9 in Shenkar & Luo, pages 237-240,
about the Determinants of Foreign Exchange Rates:
a. Which weakness or
weaknesses of the Purchasing Power Parity apply to
b. Do these weaknesses
undermine Sudan’s capital markets?
If so, what affect does it have on the capital markets?
If not, what characteristic of Sudan’s capital markets are able
the intrinsic weakness of the PPP?
c. Using Interest Rate Parity
(IRP) as a guide, determine the stability of the
Sudanese dinar. Compared to its nearest neighbors, how does
Sudanese dinar rank- more or less stable than its neighbors, or
B. What are the financial implications for ExxonMobil if Sudan’s
capital markets cannot â€œhandleâ€ the influx of large amounts of
foreign direct investment?