12 July 2018

Sudan: New Sharp Rise in Sudan Pound - U.S. Dollar Rate

Khartoum — On Wednesday, the Dollar exchange price rose sharply against the Sudanese Pound in the parallel markets outside the country: the sale price of the greenback rose to SDG 44 for foreign transactions in the Gulf and to SDG 41.50 at home.

Economic expert Dr Sidgi Kaballo attributed in an interview with Radio Dabanga the increasing rise in the price of the Dollar to the increasing demand and the insufficient foreign exchange reserves at the Central Bank of Sudan (which still quotes an indicative US Dollar rate of SDG 28.148).

He stressed that the reduction of the exchange rate of the Dollar can only be done by restricting demand for foreign currencies by cutting government spending and preventing the import of more than 500 unnecessary goods from abroad.

He ridiculed repeated statements by government officials on seeking to tackle the economic crisis and stressed that the crisis could not be tackled while the government spending is continuing to rise.

Indicative exchange rate

In an attempt to halt the plummeting Pound on the black market, the Sudanese government raised the customs rate of the US Dollar from SDG 6.7 to an indicative SDG 18 in early January.

The prices of basic commodities immediately doubled and in some cases tripled. The measure also led to the halting of incoming and outgoing traffic at the Port Sudan harbour, as suppliers refused to have their goods cleared.

The Dollar rate however, continued to rise. The greenback sold for SDG 42 on the parallel forex market in early February - against SDG 28 a month earlier

On February 5, the indicative exchange rate of the US Dollar was raised again, from SDG 18 to SDG 30. The prices of wheat and sorghum jumped again.

Dr Hasan Bashir, a professor of economics at Sudan's El Nilein University told Radio Dabanga in early May that the new measures constituted "a blow to the Sudanese economy".

He pointed to the raising the indicative Dollar price "without taking into account the need to provide reserves of foreign currency to meet the increasing demand for liquidity".

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