Tuesday, March 5, 2024

New intervention in the exchange market .. Will “Sudan Central” save the pound?


On Thursday, the Sudanese central bank released a statement on the government’s vision to correct the structural imbalances in the Sudanese economy. Will it stop the fall of the pound?

As of today, the Sudanese central bank has said it will intervene to eliminate fluctuations and unwanted changes in the foreign exchange market and ensure its stability is restored.

He added in the statement that a number of publications have been published in this regard, including changes in the exchange rate management system, export operations, import and export of gold.

Sudan’s central bank has announced that it will inject foreign exchange in support of commercial banks to meet the needs of foreign exchange customers for import purposes, according to the official Sudanese news agency Suna.

He added, “An emergency plan has been prepared to reduce the cash surplus, with the aim of reducing inflation and stabilizing the exchange rate.”

He explained that Sudan’s central bank’s flexibility in managing foreign exchange policy since February 2021 has, in addition to other resources, helped to create valued and diversified foreign reserves.

There are growing fears that Sudan will reach the point of economic collapse, with the continued depreciation of the national currency (the pound), the unprecedented rise in commodity prices and the effects of fuel price liberalization in the manufacturing sector.

As a result of the Sudanese central bank releasing the Sudanese pound’s exchange rate against the dollar on March 8, competition between local banks and the collateral market intensified in a bid to control the exchange market. The high rate of demand against supply and the existence of financial contracts to buy foreign exchange with astronomical numbers.

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The new central bank policies are reaping their benefits

For his part, an informed Sudanese source, who did not want to be named, explained that, according to the official news agency “Suna”, the policies pursued by the Sudanese central bank in recent times have begun to bear fruit.

Adar added: As of March 13, they had reached $ 102 million a week, according to clear indicators, including that the banks’ foreign exchange reserves were $ 65 million.

He explained that the benefits used before the start of the new policies were $ 68 million, which has now reached $ 96 million.

The source stressed that the bank would pursue its reform policies to reduce inflation, promote exports and improve the security and stability of the banking system.

More foreign exchange

Today, foreign exchange rates rose in Sudan on Thursday, setting records in banks, and in Sudan today the dollar price reached about 690 pounds on the equivalent “black” market.

At the same time, just days before the month of Ramadan approaches, prices of essential commodities have recorded record highs, and there are fears that the deteriorating economic situation will exacerbate the suffering of citizens.

For his part, Sudanese economist Ayob Abdel Hafeez said in an interview with Xinhua that “signs of a recession are on the horizon.”

He added, “Markets are experiencing economic stagnation due to a lack of purchasing power and an unprecedented rise in the prices of essential commodities.

He went on to say that as the month of Ramadan approaches, there are real fears such as rising prices, traders’ greed, liquidity and the devaluation of the national currency.

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With rising prices, shortages of essential commodities such as cooking gas are another problem.

Juba will soon pay $ 3.2 billion to Khartoum

For his part, the doctor said. Sol Deng Tun Abel, managing director of the National Oil Corporation of South Sudan, said on Thursday that his country was on the verge of repaying $ 3.2 billion in funding for Khartoum. According to Suna, the money was paid to support Sudan’s economy.

Abel explained the latest developments in opportunities to foster technical cooperation in the oil sector between Khartoum and Juba, explaining that since South Sudan’s separation from Thai Sudan in 2011, his country has been using oil facilities in Sudan to process its oil. , Carrying and exporting 1.8 thousand kilometers of pipeline through Sudanese ports in the Red Sea.

According to Apple, South Sudan continues to pay $ 15 per barrel of oil shipped through Sudanese ports, at $ 9.1 per barrel, including freight, processing and transportation in South Crude Sudan.

Timeline Sudan’s economic reform plan

The previous interim government, led by Abdullah Hamdok, formed in 2019, began implementing an economic reform plan under the auspices of the World Bank to exempt Sudan’s foreign debt, amounting to about $ 60 billion.

But the plan fell through on October 25 after Sudanese military chief Lt. Gen. Abdel Fattah al-Burhan dissolved the government and imposed a state of emergency.

The United States of America and international agencies have suspended hundreds of millions of dollars in aid to Sudan on the condition that citizens restore power.

Sudan’s debt forgiveness process halted at International Monetary Fund’s Improved Heavy Debt Poor Countries (HIPC) initiative.

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Washington quickly froze $ 700 million in emergency aid, while halting $ 500 million in direct budget support expected from development agencies in late November.

Another $ 150 million was not raised from the International Monetary Fund’s so-called Special Drawing Rights.

Since the secession of South Sudan in 2011, Sudan has lost two-thirds of its oil production and is facing a severe economic crisis.

Bill Dittman
Bill Dittman
"Freelance alcohol fan. Coffee maven. Musicaholic. Food junkie. Extreme web expert. Communicator."

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