The exchange rate of the Sudanese Pound against the US Dollar has risen to SDG 40.5 instead of SDG 38.5 during Eid El Fitr, which foreign exchange traders attributed to the rise of the exchange rate and the recently replaced 50 Pound note.
The exchange rate has increased during the holiday following Ramadan, stretching the pocket of consumers in Sudan. Sudanese economist Dr. Sidgi Kabello said in an interview with Radio Dabanga that a reduction in the exchange rate of the Dollar “could only be achieved by restricting the demands for foreign currencies by reducing government spending”.
In June the Central Bank of Sudan announced the launch of a new banknote of SDG 50, worth $1.77*, in the coming period. It explained the decision by stressing the leakage of counterfeit currency for trading that has increased liquidity in Sudan.
Kabello ridiculed the statements by government officials about the tackling of the economic crisis in Sudan. “Government spending was the only section that saw a rise in the first quarter of the 2018 budget.
“This increase is the main reason for the rise in customs duties, leading to the reluctance of investors and the rise in commodity prices overall.” The economist added that Sudan needs changes in economic and foreign policies, transparency in economic decision-making and a focus on encouraging productive sectors such as agriculture and industry, to emerge from the current crisis.
With regard to the Bank of Sudan’s replacement of the SDG 50 bill, Kabello explained that the reasons cited by the bank for the replacement calls for speeding up the currency change procedures.
“The main objective of the replacement of the 50 Pound bill is to introduce liquidity to the banking system.” He said that the recent measures to absorb liquidity would disrupt the circulation and the speed of circulation of money.
In Sudan’s Northern state, in Dongola, people have experienced a severe cooking gas shortage starting Eid El Fitr last week.
Residents in Dongola told Radio Dabanga that the price of a cylinder of cooking gas on the black market has risen to SDG 500 ($17.70*). One of them said that the quantities that are available in the markets could only cover a limited proportion of families’ consumption.
A resident expressed surprise at the continuation of the cooking gas shortage in Dongola. “This at a time when the cooking gas shortages have seen a breakthrough in other cities and states.”
At the end of May, the crisis of diesel and cooking gas was still in place in the national capital Khartoum and the states where bus drivers were spending the night at fuel stations to get supply. Starting June there have been less reports of queues in front of fuel or gas stations, compared to previous months.