Khartoum — The Sudanese Pound has continued its plunge against the U.S. Dollar, marking a historic rate of SDG28 in the black market on Thursday. Economic experts repeatedly said that the Bank of Sudan indirectly floats the Sudanese Pound.
According to businessmen and traders the exchange rate rose up two pounds in one day. Currency traders attributed the surge in foreign exchange, especially the U.S. Dollar, to large companies who have entered into deals overseas.
On Thursday, sales of several companies, as well as electronics, cement and iron traders were halted for fear of financial losses.
Economists deemed the ambitions that accompanied the repeal of U.S. sanctions on Sudan unrealistic, because the pound's decrease or rise depend on Sudan's production, investment and capital flows, rather than aspirations and ambitions. Some, including economic analyst Kamal Karrar, expected the exchange rate to exceed SDG30.
Karrar: "The government has exhausted all the means it has and has no choice but to leave the Dollar exchange rate to the movements of the market, to buy and sell."
He attributed the steady decrease to the Bank of Sudan's policy of gradually floating the currency, thereby canceling the official currency rates, and adopting monetary incentives. "This proves the depth of the Sudanese economic crisis and the failure of administrative solutions."
Floating exchange rate
A floating exchange rate is a system in which a currency's value is determined solely by the interplay of the market forces of demand and supply (which, in turn, is determined by the soundness of a country's basic economic position), instead of by government intervention. However, all central banks do try to defend these rates within a certain range by buying or selling their country's currency as the situation warrants.
On Wednesday, economic expert Dr Sidig Kabello also said the government had indirectly floated the Sudanese Pound without a declaration, pointing to policies announced by the Bank of Sudan last week not to provide the Dollar at the official price to the importers.