Bank Of Sudan Devalues Currency To Overcome Crippling Economic Crisis

Sudan’s central bank has devalued the currency on Sunday, announcing a new regime to unify official and black-market exchange rates in an effort to overcome a crippling economic crisis and access debt relief, Reuters reported on Sunday.

The change is a key reform demanded by foreign donors and the International Monetary Fund, but was delayed for months as shortages of basic goods and rapid inflation complicated a fragile political transition.

The central bank set the indicative rate at 375 pounds to the dollar, several commercial banking sources said, from a previous official rate of 55 pounds. Recently, the dollar traded at between 350 and 400 Sudanese pounds on the black market.

Sunday’s move had been expected late last year under an IMF staff monitoring programme that could lead to relief on Sudan’s estimated $60bn in foreign debt, but was held up by political uncertainty.

The central bank will set a daily indicative rate in a “flexible managed float”, a circular sent to banks said. Banks and exchange bureaus are required to trade within five per cent above or below that rate.

The circular also set a profit margin between buy and sell prices of no more than 0.5 per cent. Authorities would not control the rate, the central bank governor told reporters, though Finance Minister, Jibril Ibrahim said unspecified foreign funds were on their way to Sudan and the central bank could intervene if needed.

The central bank Governor, Mohamed al-Fatih Zainelabidine said, “The decision is not a float, but a policy of flexible management.”

Steps had been taken to streamline imports of strategic commodities and limit imports of non-essential goods ahead of the devaluation, officials said.

Ibrahim said Sudan’s customs exchange rate was not included in the devaluation and its reform was still under study.

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