US Dollar surpasses 2k Sudanese Pound mark in parallel market
A graph showing the fluctuation of the USD-SDG exchange rate since June 1. The red line is the USD exchange rate in the parallel market. The blue line is the official market rate. The dotted green line is the difference between the official and unofficial rates (Source: Ahmed Bin Omar via Facebook)
The value of the Sudanese Pound (SDG) against foreign currencies continues to deteriorate rapidly. On Wednesday, the US Dollar exchange rate in the parallel market surged to SDG2,100, marking a 13 percent loss in value since early June. The USD rate in the Bank of Khartoum reached almost SDG1,854.
Economic analyst Ahmed Ibn Omar explained that the official exchange rate rose from almost SDG1,265 on June 1, to SDG1,854 by July 10. “Meanwhile, the parallel rate started at SDG1,860 on June 1, sharply increasing to SDG2,100 by July 10.”
Before the war, the Dollar exchange rate in the parallel market stood at SDG60. Over the past 15 months, the Sudanese Pound’s value plummeted by 350 percent, leading to soaring prices for commodities, especially fuel.
Causes
The economic analyst told Radio Dabanga that the significant rise in the unofficial market exchange rate, and the increasing gap with the official rate, indicate new market pressures or changes in economic conditions, “possibly linked to new government or military imports”.
Economic expert Haitham Fathi added that the ongoing war and the import of military equipment have escalated spending and increased the government’s demand for foreign currencies. According to him, the Sudanese Pound “lost 45 percent of its value in banks within a month”.
Fathi argued that stabilising the Sudanese pound’s exchange rate during the ongoing war is “impossible” due to the state’s inability to attract foreign and local investments amid halted production, a lack of security and political stability, “all preconditions for economic stability.
“The ongoing war has further destroyed critical infrastructure, essential for attracting investment, and for residents to feel secure to continue spending”. These factors, along side war conditions and export restrictions from war-torn areas, contribute to a revenue shortfall.
He also noted the prevalence of high-quality counterfeit Sudanese currency in certain regions as a contributing factor for the plummeting price of the Sudanese Pound.
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