The Market Makers Committee (MMC), established by the Sudanese government earlier this month to determine foreign exchange rates has failed to curb the increasing US Dollar (USD) rates against the Sudanese Pound (SDG) in the parallel forex market. Traders predict the greenback will soon reach SDG 60.
Yesterday, the Dollar rate rose to more than SDG 52 for cheques and to SDG 49 for cash, while the official rate, set by the MMC and quoted by the Central Bank of Sudan (CBoS) remained at SDG 47.
Economic analyst Kamal Karar has predicted that the dollar will rise to more than SDG 60 in the coming period.
He told Radio Dabanga that the Dollar has continued to rise in the parallel market despite the attempt by the mechanism of market makers to determine prices based on market movement.
He describes the establishment of the mechanism as a legalisation of speculation in currency.
He told Radio Dabanga that the government's printing of a new currency of SDG 500, SDG 200 and SDG 100 will lead to inflation rates by more than 80 per cent without addressing the liquidity crisis in the country. He explained that the printing of new categories of currencies without the withdrawal of the old ones would lead to an increase in the mass of cash in proportion to the growth rates in the country, which would lead to further rise in prices, and deterioration of the currency.
Karar pointed to the loss of confidence in the banking system, explaining that people would prefer to keep their money at home, which will lead to the continuation of the liquidity crisis.
On Monday, the Director of the Bank of Sudan, Mohamed El Kheir El Zubeir, announced the issuance of a new currency category (100-200-500) Pounds to address the crisis of cash without announcing the date to be put to the public.
He acknowledged in press statements the high inflation rates since April 2016.
El Zubeir pledged to address the problem of availability of those categories by providing the needs of currency printing to work at maximum capacity.