The Sudanese pound plummeted to record lows on the black market this year after it was devalued to 18 per dollar from 6.7. Now it’s at 31.5
BY YVONNE RARIEYA | CGTN AFRICA
Sudan’s central bank on Sunday announced it will devalue the local currency to 31.50 Sudanese pounds against the US dollar, the second such move in weeks amid soaring inflation.
The new official exchange rate will go into effect on Monday, the central bank said on its website. The Sudanese pound has been trading at an official rate of 18 to the dollar but on the black market it has hit an all-time low and was selling for between 40 and 43 to the dollar on Sunday.
The new devaluation would be the second within weeks and the weakening of the pound has contributed to surging inflation, which currently is at 34 percent.
The central bank called on commercial banks for better coordination in order to put the foreign currency in “good use to help import essential items”.
Trading on the foreign exchange market has been very volatile since October 12 when Washington lifted its 20-year-old trade embargo imposed on Khartoum.
Authorities have even arrested dozens of black market traders in a bid to curb the speculation.
The pound had been expected to strengthen against the greenback after the embargo was lifted, but it has only slipped since then.
Despite the lifting of the restrictions, banks across the world remain wary of working with Khartoum, officials say.
Although Washington lifted the embargo it has still kept Sudan on its list of “state sponsors of terrorism,” a factor which officials say keeps investors away from the east African country.
Sudan’s economy is already suffering from the loss of three-quarters of its oil resources when South Sudan gained independence in 2011.
In 2016, the World Bank had urged Sudan to adopt swift structural reforms to revive its ailing economy.
The World Bank had even said that removing exchange restrictions to unify official and black-market exchange rates of the Sudanese pound against the US dollar could help revive Sudan’s sluggish economy.
Sudan’s average gross domestic product growth between 1998 and 2008 was above six percent, after which it steadily declined to around three percent in recent years.
Previous efforts at economic reform have proven controversial.
An attempt in September 2013 to cut fuel subsidies led to bloody confrontations between anti-austerity protesters and security forces that left dozens dead in Khartoum.
Since January Sudan is witnessing sporadic anti-government protests again after a sharp rise in food prices.