21 April 2019

Sudan: Experts - Reduction of dollar exchange rate does not mean immediate inflation rate drop

Khartoum — The Economist and Member of the Arab Baath Socialist Party- Sudan Country Leadership Engineer Adel Khalafallah said that the fall in foreign exchange rates against the Sudanese pound was unrealistic and would not be reflected in consumer goods price immediately due to the current challenges face the Sudan Economy.

He added that, in case of continuous foreign exchange rate decline, there would be a fall in the prices of lands, real estate and cars that have gone up madly. Engineer Khalafallah said, in a statement to SUNA, that the drop in the foreign currency prices against the Sudanese pound refers to the decline in the government demand on the dollar as a result of the procedures required by the transitional period, which include the block of all accounts belonging to the Presidency of the Republic. The economic expert added that the cycle of foreign exchange trading in the market was incomplete and it was going in one direction, pointing to the large supply of currencies owned by people who are not active in the economy as they are afraid of losses that may be inflicted on them.

Engineer Khalafallah said that the prices of consumer goods would not decrease during these days because due to the prevailence of anticipation and caution among traders as the result of pricing the goods and services according to the old cost, expecting the price decline to take place gradually in the case of stability of the exchange rate. He pointed out that the challenges facing the economy related to the structural problems including the increase of the cost of production, decrease of exports against growing imports and shortage of local currencies and the use of dollar as a commodity for trading.

It is worth mentioning that the dollar exchange rate against the Sudanese pound witnessed a decline after the dissolution of the government of the Ex-President Omar al-Bashir following its rise to more than 70 pounds and today (Sunday) dropped, in the parallel market, to 48 pounds.

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