Spotlight: Sudan pound continues decline, experts warn of economic collapse

Source: Xinhua| 2020-08-21 22:50:01|Editor: huaxia

KHARTOUM, Aug. 21 (Xinhua) -- The Sudanese pound (SDG) has continued to decline against foreign currencies, mainly the U.S. dollar, and Sudanese experts warned of economic collapse.

The exchange rate of one U.S. dollar registered 183 Sudanese pounds in the parallel market on Thursday against the official exchange rate set by the central Bank which is 55 pounds.

Sudanese experts said the decline of the Sudanese pound against foreign currencies is a sign of economic collapse, warning against the repercussions of such collapse.

"This continued decline in the exchange rate of the Sudanese pound against foreign currencies represents an economic collapse," Abdullah Noureddin, deputy director of Balad Bank in Sudan and economic expert, told Xinhua on Friday.

"I think the solution is to increase the production and maximize the cash exports to provide foreign currency," he added.

Kamal Ahmed Yousif, dean of faculty of commerce at Al Neelain University in Sudan, attributed the decline in the exchange rate to weak production and absence of external aid due to continuation of Sudan on the U.S. list of states sponsors of terrorism.

"This is a severe crisis that needs movement in many directions at the internal and external levels, where a peace agreement must be reached to end the war so as to save the resources the war consumed, while to open up to the external world to attract support, funding and investments," Yousif told Xinhua on Friday.

He summed up the factors affecting the economic situation in inflation, weakness of production and exports, lack of money supply, the psychological factor, and the state of mistrust from the business sector, consumers and investors.

In a statement issued late Thursday, the Finance Ministry accused elements from the regime of ousted President Omar al-Bashir of pumping large quantities of currency to purchase dollars and gold at higher prices to sabotage the economy.

"What is being rumored about the state's purchase of dollars from the parallel market to cover the country's need for strategic goods is untrue," it said.

The ministry described the devaluation of the Sudanese pound against other currencies as "organized sabotage against the economy" and comes as an extension of the purchase of quantities of gold at prices higher than the international stock market prices of last week.

Meanwhile, Sudan's Prime Minister Abdalla Hamdok has admitted that the prices of basic commodities are skyrocketing due to the deterioration of the economic situation.

"Yes, we lost control of the prices, and we have undertaken a number of initiatives to support families, including financial support of up to 3,000 (SDGs) per month for each family, and in order for our people not to depend on financial support, we initiated support for the producers," he said on a program broadcast by Sudan's National Radio on Friday.

Hamdok accused that "there are parties that purchase gold with 10 percent more than of its base price. This is an organized sabotage act."

The continued deterioration in the exchange price of the Sudanese pound has led to a significant hike in the prices of basic and essential commodities, which doubled the suffering of the citizens.

On Friday, the price of one kilogram of chicken exceeded 400 Sudan pounds, while the price of one kilogram of sheep meat reached 900 pounds in the capital of Khartoum.

Sudan has been undergoing a dire economic crisis since the secession of South Sudan in 2011, due to which Sudan lost 75 percent of its oil revenues.

In 2012, Sudan approved five packages to remove bread and fuel subsidies, which sparked a series of protests.

In December 2018, the worsening economic conditions sparked popular protests across Sudan, leading to the ouster of the regime of the former President Omar al-Bashir on April 2019.

It is worth noting that the inflation rate in Sudan jumped to 143.78 percent in July from 136.36 percent in June, with 7.42 percent increase.

Sudan's Central Statistics Bureau attributed in its monthly report the rise in inflation to the rise in prices of some components food and beverages group, such as drinks, bread, grains, oils, fats, meat and legumes. Enditem