US Dollar rate spikes further: 52 Sudan Pounds

The Minister of Finance announced that the 2019 budget should address the ongoing scarcity of liquidity. The purchase price of the US Dollar reached 52.30 Sudanese Pounds (for cheques) while the purchase price rose to 49 Pounds (for cash) in the parallel markets.

The latest reported exchange rate on the partqallel market was SDG 51 on October 7, translating to a growth of 2.5 per cent in two weeks. Earlier this month, the newly established Market Makers Committee appointed by the Sudanese government to determine foreign exchange rates, announced that the rate against the Dollar had risen to 47.5 Pounds.

The new exchange rate is intended to attract earnings and the savings of expatriates to the state treasury.

On Monday Prime Minister and Minister of Finance, Motaz Mousa said that next year’s budget guidelines provide a 10 per cent growth rate for the economy, as an annual average. He addressed a meeting of the cabinet on macroeconomic conditions, reform vision and the budget guidelines of 2019. “Sudan could take its place among major economies between 10 to 15 years with an average growth rate of at least 7 per cent,” the minister said.

The new budget would aim to stabilise the exchange rate and address the scarcity of money which has exacerbated the situation in Sudan.

Minister Mousa said that raising subsidies currently affects the incomes of people and their savings, and their ability to live decently. “This requires the implementation of available and possible policies paving the way for a stable economy in the exchange rate and reduction of inflation.”

2019 budget

Sudan is suffering from a chronic lack of hard currency and cash, while exports remain low. High inflation figures caused a severe drop in purchasing power among the Sudanese since early January, after the government implemented major austerity measures.

New export and import measures will be followed by additional measures in the coming budget to boost these policies. Recently, the president of the Central Bank of Sudan has denied plans to entirely liberalise the exchange rate of the Sudanese Pound (SDG). The cabinet approved new measures and import priorities will be set for fuel, wheat, sugar, medicines, and agricultural, industrial and medical requirements. The bank will assign foreign currency resources received from gold and non-petroleum export revenues to importers of these commodities.

In the beginning of this month, the Central Bank started printing a new denomination of currency. The initiative is aimed at solving the current liquidity crisis in the country, however critics question the wisdom of the move.

Warning

In response to Minister Mousa’s statements, President of the National Umma Party, El Sadig El Mahdi, warned that the price of the Dollar will rise, which will raise the cost of living. He claimed that SDG 2.5 billion ($88.8 million*) is required to import food for Sudan, in addition the country’s dependence on imports of fuel and sugar.

El Mahdi stressed that the economy will only work with political reform to stop the war completely and the spending associated with it, in addition to ending corruption.

Sudan’s 2018 annual budget announced at the beginning of this year has been widely criticised for allocating a high percentage to the army, security service and paramilitary forces, and neglecting the education and health sectors.

* Based on the indicative US Dollar rate quoted by the Central Bank of Sudan (CBoS)