Sudanese Pound continues to fall despite optimism after Paris Conference

The US Dollar rate rose again between Wednesday and Thursday, officially with one Sudanese Pound, while the parallel forex market recorded a raise of two Pounds. Commercial banks in the country can now sell hard currencies to customers for the purpose of importing much needed basic commodities.

According to the Central Bank of Sudan (CBoS), the price of the greenback reached SDG409.79 for purchase and SDG412.86 for sale yesterday. On the parallel market, the price reached SDG415, compared to SDG413 on Wednesday.

Forex traders expressed their surprise at the continued rise of the dollar despite the successful outcomes of the Paris Conference earlier this week, where Sudan’s huge debt arrears were cleared, paving the way for Sudan’s re-entry into the international financial community.

New electronic system

The CBoS sent a circular to all banks in Sudan on Thursday, regulating the foreign exchange in the country, about three months after the Ministry of Finance introduced a managed currency float on February 21. The official US Dollar price jumped from SDG55 to SDG375, which was nearly the rate of the parallel market.

In a press release, the bank explained that the move is intended to create stability for the Sudanese Pound. “The decision of the Central Bank of Sudan to hold foreign exchange auctions is a preliminary step for more intervention,” the bank said.

“This will soon be followed by the launch of a tight electronic system. This will enable all those dealing with hard currencies to trade with ease and transparency. It will open the current stalemate at the forex market and combat speculation and other harmful operations”.

Inflation

The Al Bashir regime (1989-2019) has left the country with a collapsing economy and a shocking lack of hard currency needed for the import of basic consumer goods. Inflation is soaring and the Sudanese Pound continues to fall, despite the levelling of the official forex rates with those at the parallel market in February.

The government of Hamdok has taken tough measures such as subsidy cuts and introduced a managed currency float to qualify for an IMF debt relief programme. These unpopular measures were necessary to move towards debt relief by the end of the year, the PM said.

Earlier this month, the Council of Ministers approved the establishment of a gold stock market and an agricultural crops stock market.

Radio Dabanga reported on Wednesday that the official inflation rate for April was 363 per cent, a raise of 14 per cent compared to 341.78 per cent for the month of March.

According to the Famine Early Warning Systems Network (FEWS NET), most areas of Sudan will face acute food insecurity this year. A study of Sudan’s National Council for Child Welfare last year revealed that one in three Sudanese children is stunted because of malnutrition.