Historic decline in the Sudanese Pound’s value and an incomparable rise in prices

The significant increase in foreign currency exchange rates against the Sudanese pound has led to a dramatic rise in the prices of basic commodities across the country.

Sudan’s financial markets witnessed a historic rise in foreign currency rates on Monday, the highest since Sudan’s independence. This comes amidst a rapid decline in the value of the Sudanese pound on the parallel market.

The US dollar reached (3,200 pounds) on the parallel market on Monday. Bankers and economists attributed the sudden rise from (2,800 to 3,200 pounds) in a matter of hours to the purchase of military supplies and the increase in the customs dollar, which led to the dramatic rise in the dollar price on the parallel market, similar to the prices of basic commodities.

Economic experts believe that the clear imbalance in the exchange market, particularly in the parallel market, is a direct reflection of the repercussions of the war on various sectors, including the suspension of foreign remittances, the withdrawal of local deposits, and the decline in the performance of commercial banks in financing vital imports. In addition,  the Central Bank of Sudan’s reliance on printing currency without monetary cover or foreign reserves also contributes to exacerbating inflation and widening the gap between official and parallel rates.

Experts stated that unstable financial policies, the cessation of exports, and the decline in remittances from expatriates are all intertwined factors that deepen the economic crisis, amidst the spread of ‘dollarization’ whilst savings are kept out of the banking system. Meanwhile, parallel market traders have taken precautionary measures, halting the sale of foreign currencies and focusing their operations on purchasing at low prices, reflecting the severe tension in commercial activity.

Furtherance local reports indicate massive bank transfers from Sudan and a significant decline in savings, indicating growing concerns about the country’s future as the war continues for the third consecutive year.

The parallel market is the main source of foreign currency, especially in the fuel sector. Exchange rate fluctuations occur daily, sometimes up to three times a day, reflecting the fragility of the monetary system and the lack of stability in financial policies.

For their part, international organizations have warned that the continuation of these conditions without radical political and security solutions will lead to a new wave of inflation, threatening citizens’ purchasing power and exacerbating their daily suffering. Economic reports indicate that the war has disrupted tax revenues and led to a sharp decline in the performance of the agricultural and livestock sectors, significantly impacting the tate’s ability to finance essential imports such as fuel, wheat, and medicine, opening the door to further deterioration in the overall economic landscape.