Foreign currency exchange rates for the Sudanese Pound (SDG) against major international currencies have remained relatively stable since the Khartoum government effectively floated the Pound and unified the official and parallel exchange rates on 22 February. The measures were taken to halt the ongoing inflation and economic crises in Sudan, however, economic analyst Hafiz Ismail attributes this to caution on the part of parallel market traders, and warns it should not be taken for granted and that real reforms are needed to heal the Sudanese economy.
“The parallel market dealers are in a state of caution and anticipation, waiting for the next step of the government,” says economic analyst Hafiz Ismail in an interview with Radio Dabanga yesterday, however he questions the government’s ability to cover all the country’s hard currency needs for imports, explaining that “the promises the government has received were not enough to fill the gap”.
He said that “the stability of the exchange rate in the medium term is not an indication of its continuation,” but at the same time he stressed the importance of unifying the exchange rate in removing distortions.
“Merely taking monetary measures does not address Sudan’s problems,” Hafiz says. “The current economic situation is a reflection of structural problems related to the destruction of basic sectors such as agriculture, transformational agriculture, and pastoralism [during the former regime].”
He noted the weakness of the infrastructure of the Sudanese economy, stressing the urgent need to invest in basic sectors, to achieve reforms, and change the way of dealing with the problem. He also stressed the need to expedite the transfer of companies belonging to the security and military sectors to the jurisdiction of the Ministry of Finance.
As previously reported by Radio Dabanga, Sudan’s Central Bureau of Statistics announced yesterday that annual inflation jumped to 330.78 per cent in February from 304.33 per cent in January, an increase of more than 30 per cent.
In February, economic expert Sidgi Kaballo said he expected the US Dollar exchange rate to rise to SDG600 by May “unless the government takes urgent measures”. Following the change in policy, Finance Minister Jibril Ibrahim said that unifying the currency (setting the official exchange rate at the parallel market exchange rate) will bring Sudan stability, stimulate remittances from Sudanese living abroad, and attract foreign investments.
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