The announcement by the Central Bank of Sudan on Monday of the issuance of a new SDG 1,000 note reflects rising inflation in the country and the continued erosion of the purchasing power of the Sudanese pound, despite a relatively stable exchange rate.
In an interview with Radio Dabanga Sudan today program, economic and political analyst Hafiz Ismail said the issuance of the SDG 1,000 denomination is a sign of rising inflation and continued erosion of the purchasing power of the Sudanese pound, despite the fact that the Exchange rate of Sudanese pound against international currencies is relatively stable at present. The SDG 1,000 note is the latest in a series of new notes of increasingly higher denominations issued over the past few years.
Isamail says the sharp increase in taxes and customs duties will also have significant inflationary effects, and attributes the significant rise in inflation to the state of depression in the country. This situation is exacerbated by the fact that the large commercial banks have to repay large debts to the Bank of Sudan, so that they are reluctant to lend money to their customers.
He attributes the current relative stability in the pound rate to the recession and stalled trade movement, and an unaffordable process for consumer staples.
in the country. “The public even gave up basic necessities due to lack of purchasing power. This recession negatively affects production, leading to disastrous results.
In 2029, banks across the country restricted cash withdrawals, which intensified in the run-up to the overthrow of Al Bashir’s regime in April 2019. This resulted in long queues of customers trying to withdraw some money from the banks. Public confidence in the banking system declined, so merchants and the public decided to keep their money at home rather than deposit it in banks.
The socio-economic detritus of the 30-year dictatorship of Al Bashir, who was also tried in Khartoum for monetary crimes, has left the Sudanese economy in shambles, with the value of the Sudanese pound (SDG) at an all-time low against international currencies.
In agony, Al Bashir’s regime desperately ordered the printing of new monetary denominations of SDG 100, SDG 200 and SDG 500 by the Central Bank of Sudan in a bid to resolve the chronic public and commercial liquidity crisis.
In the years that followed, worries about rising inflation grew, reinforced by Sudan’s import of the most basic necessities, the budget deficit and the dramatic increase in wages financed by printing banknotes. bank, which led to a further devaluation of the pound.
In an attempt to revitalize the currency, in February 2020 the government unified the exchange rate of the Sudanese pound in an attempt to halt ongoing inflation. At that time, the official exchange rate of 1 USD was adjusted from SDG55 to the prevailing parallel market rate of SDG375.
Most recently, in March this year, the Central Bank of Sudan stopped issuing the indicative price, after it announced again the unification of the Sudanese pound exchange rate to enable the determination of exchange rates without interference from the Central Bank. Forex traders on the parallel market reported that the dollar exchange rate at the time was 560 SDG.
United Nations reports indicate that the value of the local currency has decreased 20 times (2,000%) in the past five years.