World, Economy, Africa

Sudan’s Central Bank floats currency

Central Bank announces new regime to unify official, black market exchange rates amid high inflation

Nazik Melon   | 21.02.2021
Sudan’s Central Bank floats currency

KHARTOUM, Sudan

Sudan’s Central Bank said Sunday it had partially floated the currency and announced a new regime to unify the official and black market exchange rates.

In a statement, the bank said the “decision aims to unify and stabilize the exchange rate, transfer resources from the parallel market to the official market, and attract remittances from Sudanese working abroad through formal channels.”

The decision is intended to grant the Central Bank full powers to intervene to stabilize the exchange rate if the limits it sets are exceeded.

The bank said the move 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.

"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 US Embassy in Khartoum welcomed the Sudanese decision to “reform” to exchange rate, describing the move as “courageous”.

“This decision paves the way for debt relief and significantly increases the impact of international assistance,” the embassy said on Twitter.

It added the 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.”

Sudan’s economy has been crippled by years of US sanctions, mismanagement, and civil war.

Sudanese authorities have announced curfews in several regions in recent days to contain protests of worsening economic conditions characterized by inflation and shortages of basic commodities.

Last week, official data showed that annual inflation rose to 304.33% in January from 269.33% a month earlier.

In the statement, the Central Bank said it reconsidered all economic policies to help achieve economic stability.

The dollar was exchanged for 375 Sudanese pounds on the black market as of Saturday compared to the official rate of 55 pounds.

*Ibrahim Mukhtar from Ankara contributed to this report​​​​​​​

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