Sanctions relief ‘honeymoon’ short-lived as Dollar gains against Sudanese Pound

The exchange rate on the parallel markets of Khartoum once again exceeded the SDG 20 mark, less than a week after a slight recovery following the US decision to lift economic sanctions on Sudan, while inflation rates have continued to increase.

In a statement yesterday, Sudan’s the Central Bureau of Statistics recorded 35.13 per cent percent inflation in September – an increase of 1.5 per cent from August.

In an interview with Radio Dabanga, economic analyst Hafiz Ismail confirmed the close link between the steady increase in inflation rates and the overall performance of the Sudanese economy in its monetary and financial aspect.

He explained that the inflation reflects the cost of living index.

Ismail pointed out that the rise in the Dollar exchange rate leads to increasing inflation rates and pointed to its impact on the prices of local and imported goods.

According to the monthly report issued by the Central Bureau of Statistics on Wednesday, the commodity and services groups have contributed to the rate of inflation at varying rates.

Foreign exchange dealers in Khartoum told Radio Dabanga that the exchange rate of the Dollar rose on Wednesday to the sale price of SDG 20.7 while the purchase price amounted to SDG 20.3 after a drop witnessed following the issuance of the US decision to lift the sanctions ranging between SDG 18.5 – SDG 19 on Saturday.

Psychological factors

Ismail attributes the decrease in the Dollar exchange rate against the Pound following the decision of lifting the sanctions for psychological factors unrelated to the actual performance of the Sudanese economy and attributed the increasing rise in the dollar exchange rate to increased demand for hard currency for import and medical treatment.

He expected a steady rise of the Dollar in the coming period.

He conditioned the decrease of the exchange rate with the emergence of real production activity in the country which is unlikely to happen in the near future.

On Wednesday the Central Bank of Sudan said that transfers in Dollars to Sudan began to flow after the lifting of sanctions through the Sudanese banking system to two Sudanese banks, one of these transfers from America and the other From Europe.