{"id":20134148,"date":"2026-06-28T10:16:00","date_gmt":"2026-06-28T08:16:00","guid":{"rendered":"https:\/\/www.dabangasudan.org\/?p=20134148"},"modified":"2026-06-28T18:27:44","modified_gmt":"2026-06-28T16:27:44","slug":"economist-monetary-and-admin-measures-will-not-halt-sudanese-pound-decline","status":"publish","type":"post","link":"https:\/\/www.dabangasudan.org\/en\/all-news\/article\/economist-monetary-and-admin-measures-will-not-halt-sudanese-pound-decline","title":{"rendered":"Economist: \u2018Monetary and admin measures will not halt Sudanese Pound decline\u2019"},"content":{"rendered":"\n

By Suleiman Siri for Radio Dabanga<\/em><\/strong><\/p>\n\n\n\n

The continued fall of the Sudanese Pound (SDG) against the US Dollar (USD) and other international currencies, has sparked widespread debate. Within the space of a week, the government raised the indicative customs USD exchange rate from SDG 3,395 to SDG 3,517 and banned the import of a number of goods. But the measures have failed to produce the desired results or stem the SDG\u2019s decline.<\/strong><\/p>\n\n\n

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Economist Dr Wael Fahmi (Photo: Supplied)<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n

USD has continued to climb on the parallel market, reaching about SDG 5,600, despite the government\u2019s attempt to curb the increase by raising the customs USD rate from SDG 3,395 to SDG 3,517 within a single week. The move has failed to halt the currency\u2019s depreciation, highlighting the limited impact of conventional monetary policies under current conditions.<\/p>\n\n\n\n

An apparent contradiction<\/strong><\/p>\n\n\n\n

Official figures, meanwhile, indicate that inflation has fallen, raising questions about the relationship between inflation and the exchange rate.<\/p>\n\n\n\n

In an interview with Radio Dabanga, the economist Dr Wael Fahmi said the contradiction is only apparent and does not reflect any genuine improvement in living standards. Ordinary people, he argued, judge the crisis by what they can afford to buy, not by economic indicators alone.<\/p>\n\n\n\n

Fahmi attributes the situation to the nature of Sudan\u2019s economy, which has become heavily dependent on imports after war and years of poor economic policies destroyed much of the country\u2019s productive base.<\/p>\n\n\n\n

As the USD continues to rise, the purchasing power of wages and household incomes declines, leading to a further deterioration in living standards.<\/p>\n\n\n\n

He also argues that official indicators such as the inflation rate may no longer provide an accurate picture because collecting reliable data in conflict-affected areas has become extremely difficult. As a result, the figures rely largely on information from relatively stable regions. Differences in spending patterns between states also widen the gap between official statistics and people\u2019s day-to-day experience.<\/p>\n\n\n\n

Why inflation appears to be falling<\/strong><\/p>\n\n\n\n

Fahmi believes the decline in purchasing power and the slowdown in markets help explain the reported fall in inflation. Weak consumer demand limits traders\u2019 ability to raise prices, creating the impression that inflation is easing, even though prices continue to rise, albeit at a slower pace.<\/p>\n\n\n\n

He also points to what economists refer to as the \u201cbase year effect\u201d. Comparing current prices with exceptionally sharp increases recorded in the previous year can make inflation appear to have fallen, even when prices remain high.<\/p>\n\n\n\n

The customs dollar and the exchange rate<\/strong><\/p>\n\n\n\n

Turning to the customs dollar, Fahmi said its relationship with the weakening SDG is part of a vicious circle.<\/p>\n\n\n\n

Raising the customs dollar increases the cost of imports, prompting traders to turn to the parallel market to obtain foreign currency. This, in turn, increases demand for USD, drives up their price and places further downward pressure on the SDG.<\/p>\n\n\n\n

As the currency weakens further, the government is forced to increase the customs dollar again, perpetuating the cycle.<\/p>\n\n\n\n

Divergent USD markets in Khartoum and Nyala<\/strong><\/p>\n\n\n\n

Fahmi also said Sudan now effectively has several separate currency markets because of the country\u2019s geographical division between rival areas of control.<\/p>\n\n\n\n

The disparity is reflected in the sharp difference in exchange rates between cities. In Nyala, the USD trades at around SDG 3,600, compared with more than SDG 5,500 in Khartoum.<\/p>\n\n\n\n

He said the differences reflect local factors including supply and demand, trade routes, financial transfers and the growing reliance on the shadow economy.<\/p>\n\n\n\n

Asked why the USD is significantly cheaper in Nyala, the administrative capital of South Darfur under the control of the parallel \u201cTasis\u201d government, than in Port Sudan, Fahmi said the stark geographical disparity stems from fragmented markets and isolated monetary systems created by the mutual blockades imposed by the two warring sides.<\/p>\n\n\n\n

Speaking to Radio Dabanga, he said Port Sudan, the country\u2019s current administrative capital, experiences exceptionally high demand for USD because it is Sudan\u2019s only functioning seaport and the principal gateway for financing both government and commercial imports, including food, fuel and medicines.<\/p>\n\n\n\n

\u201cGovernment procurement and logistical services also generate enormous demand for foreign currency,\u201d he said, \u201cplacing huge pressure on the USD and driving up its value.\u201d<\/p>\n\n\n\n

In contrast, he said, the economy in areas controlled by the parallel Tasis administration has become increasingly dependent on the shadow economy and alternative supply routes through Chad, Libya and the Central African Republic.<\/p>\n\n\n\n

\u201cTraditional commercial activity and large-scale imports have largely stopped,\u201d he added. \u201cAt the same time, SDG liquidity in Darfur is extremely limited, following decisions by what is known as the RSF-controlled administration.\u201d<\/p>\n\n\n\n

Rebuilding production is the only sustainable solution<\/strong><\/p>\n\n\n\n

Fahmi concludes that the root of Sudan\u2019s economic crisis lies not simply in the exchange rate or the customs dollar, but in the widespread destruction of the country\u2019s productive base.<\/p>\n\n\n\n

The collapse of official exports, the growing dependence on imports and the continued expansion of the money supply in a wartime economy have all combined to deepen the crisis.<\/p>\n\n\n\n

He argues that no lasting solution to the decline of the SDG can be achieved through monetary and administrative measures alone.<\/p>\n\n\n\n

Instead, he says, Sudan must restore agricultural, industrial and mining production, increase genuine exports and rebuild the real economy, which remains the country\u2019s principal source of both economic value and foreign exchange.<\/p>\n