Sudan devalues its currency to stabilize the economy
Feb 23, 2021(SSNN) — Sudan’s Central Bank n Sunday announced that it has floated its currency to help stabilize its economy.
Sudanese pounds….
The dollar has been trading between 350-400 pounds in the black market while its official exchange rate was 55 pounds.
The Central bank put the exchange rate at 375 pounds per dollar and will fluctuate according to supply and demand.
According to the bank, the move aims at unifying and stabilizing the exchange rate, transfer resources from the parallel market to the official market, and attract remittances from Sudanese working abroad through formal channels.
“Unifying the exchange rate will limit the smuggling of goods and currency and fill in the gaps to prevent speculators from taking advantage of the gap between the official and black-market rates,” the bank said.
The central bank will set a daily indicative rate in a “flexible managed float”, a circular sent to banks said. Banks and exchange bureaus are required to trade within 5% above or below that rate.
The circular also set a profit margin between buying and selling prices of no more than 0.5%.
The country also aims to attract foreign investments and normalize relations with regional and international financing institutions in order to attract grants and loans and encourage producers, exporters, and the private sector with a suitable exchange rate.
“Our economy is in a situation that cannot be addressed without making such a decision,” Finance Minister Gibril Ibrahim said. “It is in our interest, in the interest of the country, and in the interest of the citizen.”
The US Embassy in Khartoum welcomed the decision saying it will now help Sudanese companies and international investors to carry out business in the country.
“This decision will also help Sudanese companies and attract international investment as both local and foreign companies will no longer encounter difficulties doing business in Sudan because of the dual exchange rate,” it said.
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