The Central Bank of Sudan has decided on fixing the pound’s exchange rate against all foreign currencies.
On Monday, the Central Bank of Sudan gave banks and exchanges the freedom to set the appropriate pricing for the pound’s exchange rate against a number of foreign currencies.
It is expected that the decisions will exacerbate the depreciation of the local currency, which fell below 600 pounds against the US dollar in last week’s trading.
The Central Bank announced, in a press circular, that the bank has finally exited from the processes of determining the prices of currency sales and purchases.
The move comes as part of a new monetary policy approved by the Central Bank to contain the collapse of the local Sudanese pound.
The decisions specifically target attracting back expatriates remittances, who had begun opting for the parallel market for currency exchange due to the large differences between them and commercial banks.
The Central Bank said that the new policy would bring about economic stability and increase the banks’ ability to attract resources.
It is expected that the new policy will have inflationary effects –due to a recent devaluation of the local pound– which means an increase in the prices of goods and services.
The coup d’etat of the 25th of October led to billions of dollars in support for the now-dissolved civilian transitional authority Sudan being frozen.
Despite the public treasury being almost empty, most of the country’s foreign currency savings go into spending on security and sovereignty sectors.
In the past few days, commercial banks witnessed a great demand for withdrawing deposits and savings, and converting them into foreign assets and currencies.
It is also believed that doubts the Sudanese have in their banking system will lead to a crisis in meeting the demands of bank customers, similar to what was witnessed in the last days of the ousted al-Bashir regime.