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Sudanese Pound hits record low against US Dollar

July 20 - 2016 KHARTOUM
File photo
File photo

Tuesday saw the Sudanese Pound (SDG) drop to a record low against the US Dollar, as demand for greenbacks outstripped supply on the parallel market.

At one point, Dollars were trading on the parallel market for SDG14.3.

Traders told Radio Dabanga the rise of the Dollar can be attributed to the growing demand during the period following the Eid Al Fitr holiday by companies that cover the needs of the parallel import market.

In an interview with Radio Dabanga on Tuesday, banking expert and economic analyst Hafez Ismail said that the deterioration in the value of the currency is a result of the imbalance in the economy and the running account. Another contributor is Sudan’s need for hard currency more than exports or unforeseen exports.

He said if the situation continues in this way, foreign currency demand will outstrip supply, which will contribute to the deterioration of the Sudanese Pound.

Also he pointed out that “the issue of US sanctions is having a clear effect in the banking process by increasing the cost of banking. There is also the internal deficit, which will directly lower the price of the currency and cause continuous inflation at the same time.

“It will require the lifting of US sanctions from Sudan, and attracting foreign investment to the country, in order to increase the resources of the state.

He stressed that Sudan needs more than $8 billion for import and bridging of the deficit, adding that the solution will not be realised overnight and the continuous deficit could reach up to about 50 per cent and more.

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