US Dollar price rises on Sudan’s black market

05/01/2014 17:56

The black-market price of the US Dollar against the Sudanese Pound has increased significantly. On 1 January it reached the purchase price of eight pounds – close to the value reached in April 2012 when clashes broke out in Heglig. Traders attributed the rise to the panic wrought by the insecurity in the state of South Sudan. Many of them are reluctant to sell Dollars in anticipation of what could come out of the armed conflicts in South Sudan. Despite the rise in the US Dollar price, the black market, termed “parallel market” in the Sudanese media, has been active because of the shortage of Dollars at the official market. Money transfers from Sudanese working abroad bring in considerable amounts of Dollars. People are buying Dollars to keep their property at value, for profit, for medical treatment and education purposes abroad. The prices of other foreign currencies, like the Saoudi Riyal and the Euro, are stable, but there is a large turnout for the US Dollar despite the lack of supply,” a black market trader explained. Not only black market traders predict that “the US Dollar price rise to eight Sudanese Pounds may be considered as “a prelude to a large increase”. Isam Boub, professor of Economics at the Nilein University, does not rule out the possibility that the price of the US Dollar against the Sudanese Pound (SDG) will reach double digits within the next two months. “The current budget will collapse, the state will run out of money and will have to start printing new quantities of Pounds.” According to Boub, the “partial or total halt” of the South Sudanese oil production due to the current political crisis, will add an amount of $1.5 billion to the losses experienced after the secession in 2011, “a loss Sudan cannot solve in the coming period”. Another economist -who requested anonymity- commented that the current rise of the Dollar was expected. “The demands from the black market are extending, while the production and productivity in Sudan is extremely low”. “Many Sudanese are now dealing in the US Dollar as a commodity and not as an economical value. They buy Dollars to keep their property at value or to make profit.” He also predicted that the Dollar will rise to ten Sudanese Pounds in the coming period. “The 2014 budget is far from reassuring, and does not contain serious programmes to boost the production and productivity. The black market will only lose its importance when the government initiates long-term plans to strengthen the productivity and will deal with its debts on a short term.” (Source: Akhbar El Youm daily newspaper) File photo Related:Sudan prepared for suspension of South Sudan oil: Finance Minister (31 December 2013) Sudan’s inflation climbs to 42.6% in November (23 December 2013) ‘Economic disaster for Sudan if South Sudan conflict continues’: expert (22 December 2013)

The black-market price of the US Dollar against the Sudanese Pound has increased significantly. On 1 January it reached the purchase price of eight pounds – close to the value reached in April 2012 when clashes broke out in Heglig.

Traders attributed the rise to the panic wrought by the insecurity in the state of South Sudan. Many of them are reluctant to sell Dollars in anticipation of what could come out of the armed conflicts in South Sudan.

Despite the rise in the US Dollar price, the black market, termed “parallel market” in the Sudanese media, has been active because of the shortage of Dollars at the official market. Money transfers from Sudanese working abroad bring in considerable amounts of Dollars. People are buying Dollars to keep their property at value, for profit, for medical treatment and education purposes abroad.

The prices of other foreign currencies, like the Saoudi Riyal and the Euro, are stable, but there is a large turnout for the US Dollar despite the lack of supply,” a black market trader explained.

Not only black market traders predict that “the US Dollar price rise to eight Sudanese Pounds may be considered as “a prelude to a large increase”. Isam Boub, professor of Economics at the Nilein University, does not rule out the possibility that the price of the US Dollar against the Sudanese Pound (SDG) will reach double digits within the next two months. “The current budget will collapse, the state will run out of money and will have to start printing new quantities of Pounds.”

According to Boub, the “partial or total halt” of the South Sudanese oil production due to the current political crisis, will add an amount of $1.5 billion to the losses experienced after the secession in 2011, “a loss Sudan cannot solve in the coming period”.

Another economist -who requested anonymity- commented that the current rise of the Dollar was expected. “The demands from the black market are extending, while the production and productivity in Sudan is extremely low”. “Many Sudanese are now dealing in the US Dollar as a commodity and not as an economical value. They buy Dollars to keep their property at value or to make profit.”

He also predicted that the Dollar will rise to ten Sudanese Pounds in the coming period. “The 2014 budget is far from reassuring, and does not contain serious programmes to boost the production and productivity. The black market will only lose its importance when the government initiates long-term plans to strengthen the productivity and will deal with its debts on a short term.” (Source: Akhbar El Youm daily newspaper)

File photo

Related:

Sudan prepared for suspension of South Sudan oil: Finance Minister (31 December 2013)

Sudan’s inflation climbs to 42.6% in November (23 December 2013)

‘Economic disaster for Sudan if South Sudan conflict continues’: expert (22 December 2013)