Central Bank of Sudan: Old SDG 50 notes to be withdrawn

The new director of the Central Bank of Sudan (CBoS), Hussein Jungul, said a decision would be expected to withdraw the old category of SDG 50 notes from circulation during the coming period.

Yesterday, the director said during his meeting at the Central Bank with the prime-minister that the meeting discussed the efforts of the Central Bank in providing cash.

He pointed to the prospective decision of the state to withdraw the old category of SDG 50 notes from circulation to be issued during the coming period.

The old notes were used for many years until a new design was introduced in June 2018.

'Destruction of monetary system'

The conflicting decisions by the Central Bank of Sudan around the replacement of the SDG 50 note are “a deliberate destruction of the monetary system, confusion in the monetary policies and an indication of the absence of a systematic approach to economic policy,” a leading economist told Radio Dabanga at the time.

Dr Hasan Bashir who is professor economics at El Nilein University, described in an interview with Radio Dabanga in June 2018 that  the decision to remove the old SDG 50 note from circulation as “death and home destruction”.

He explained that the SDG 50 note constitutes 70 per cent of the mass of cash of which 80 per cent is outside the banks. He predicts that these funds will not be returned immediately to banks and that their owners would resort to other alternatives.

He attributed the rise of the exchange rate of the Dollar to the barrier of SGD 40 to the increase in demand because of the recourse of the holders of SDG-50 note stored them for foreign exchange.

Liquidity crisis

The Sudanese Pound has continued to drop against the US Dollar, against the backdrop of ongoing demonstrations calling for the step-down of President Al Bashir and his regime from power, which were sparked by bread and fuel shortages in Atabara on 13 December 2018.

The printing of new currency by the CBoS has been necessitated by hyperinflation, coupled with a chronic shortage of hard cash. Cash withdrawals from ATMs are also severely restricted. As a result of the cash shortage, much of the available currency is in circulation and kept by people at home rather than deposit it into banks from where it is difficult to retrieve.