Riyadh, (Business News Report)|| The Sudanese pound has witnessed a noticeable deterioration in recent days, in light of the great demand for the US dollar.
The depreciation of the Sudanese pound threatens the reforms the government is embarking on to obtain loans from international financial institutions.
The weakness of external transfers and the expansion of speculation exacerbates the decline, in light of expectations that the decline will continue.
The Central Bank of Sudan recently allocated more than $16 million for importing necessary commodities. But the local currency is still losing value, as the price of the dollar reached more than 491 pounds.
According to the United Nations Economic and Social Commission for Western Asia (ESCWA), the local currency in Sudan lost about 87 and 82 percent of its purchasing power against the dollar between 2019 and 2021, respectively.
It was found in a recent ESCWA report issued last Wednesday that Sudan witnessed the largest percentage change in the value of real GDP, with a decrease of about 20 percent.
According to specialists, the main reason for the decline of the pound against the dollar despite the liberalization of the exchange rate is the government policies that relied on the prescription of the International Monetary Fund. This led to an unprecedented increase in inflation rates to more than 422%, before falling to 318% last December.
Sudanese economist, Somaya Sayed, says: “The volatility of the prices of goods and services is increasing day by day. The pound has become worthless. With the continuation of the political crisis, road closures and the cessation of export operations, we expect more price increases, a weak national currency and more inflation.”
She adds that the stability of the exchange rate requires the adoption of policies that encourage production, and not administrative or security measures like what is being followed now.
The parallel market remained for months in anticipation of the policy of liberalizing the exchange rate and knowing the government measures, especially since there are many unemployed people who have taken the dollar trade as a profession in light of the bad economic conditions. This makes them keen that this policy will not succeed, according to observers.
Some large traders also take the opportunity to redistribute the parallel market map by withdrawing local currency from banks in large quantities, which made the banking sector unable to meet the demands of dealers in dollars, especially large quantities.
