x

Abu Dhabi, UAESaturday 20 October 2018

Sudan slashes daily exchange rate

Move comes on the first day of a new currency mechanism in what is in effect a significant devaluation

A Bank of Khartoum branch in Khartoum, Sudan. The country has implemented new fiscal policy. Reuters
A Bank of Khartoum branch in Khartoum, Sudan. The country has implemented new fiscal policy. Reuters

Sudan set its daily exchange rate on Sunday at 47.5 Sudanese pounds to the US dollar, the head of the country's bankers' union said, on the first day of a new currency mechanism in what amounts to a sharp devaluation.

The new rate was down from 29 Sudanese pounds to the dollar, the official rate on Saturday. It was also lower than the black market rate of around 45.5 pounds to the dollar.

Sudan's central bank governor, Mohamed Kheir Al Zubeir, announced on Thursday that from Sunday the country would set its daily exchange rate using a newly formed body of bankers and exchange bureaus, part of a package of measures designed to tackle an economic crisis.

Mr Al Zubeir said the measures would mean that the Sudanese pound was likely to lose value against the dollar initially before later stabilising.

_______________

Read more:

Sudan gets new government as PM keeps finance post

Sukuk issuance to grow in Africa as Islamic debt demand rises

_______________

"The mechanism met and set the pound rate at 47.5 pounds to the dollar," said Abbas Abdallah, the head of the country's bankers' union.

Under the new mechanism, Sudan will set its gold price in line with international prices but payments would be made at the new exchange rate fixed by the body of bankers and exchange bureaus.

Sudan's economy has been struggling since the south seceded in 2011, taking with it three-quarters of oil output and depriving Khartoum of a crucial source of foreign currency.

Inflation in Sudan is rampant and hit a record high 66 per cent in August, one of the highest rates in the world.