Forex scarcity pushes US Dollar price to record 40 Sudanese Pounds

A deepening scarcity of hard currency in Sudan has pushed the price of a US Dollar to a new record high of SDG 40 on the parallel market in Khartoum.

This new record reported on Wednesday shows the sharp decline in the Sudanese currency, which has effectively halved in value in just three months. The greenback was trading at around SDG 20 at the beginning of November 2017.

“There is a major shortage in the foreign exchange market because of the tight measures taken by the government against the parallel market traders” one trader told Dabanga Radio in Khartoum on Monday.

He predicted that US Dollar prices will continue to rise on a daily basis because the market is dominated by scarcity and not supply and demand.

The falling value of the Sudanese currency has resulted in price hikes for fuel, food, and medicines which have prompted mass public protests across the country.

Clampdown

In November last year, the Sudanese Finance Ministry revealed new security and administrative measures to prevent speculation in foreign currency. A number of major currency dealers were arrested, and others fled abroad. The Central Bank of Sudan (CBoS) ordered banks to freeze the assets of dozens of Sudanese individuals and companies. The State Security Prosecution charged them for trading currencies, against the Central Bank’s instructions.

In an attempt to bolster foreign currency reserves, the CBoS also instructed all banks in Sudan to hand over remittances by Sudanese expatriates abroad in the same currency as the transfer.

New official rate

In early January this year, the Sudanese government raised the customs rate of the US Dollar from SDG 6.7 to SDG 18, in a bid to halt the plummeting of the Pound on the black market. To no avail however, as the Dollar rate increased from SDG 28 to SDG 34.50 in the following two weeks.