War-torn Sudanese pound plunges, dollar surges above 2,100

July 14, 2024 (Port Sudan) – The Sudanese pound continues to fall against foreign currencies, exacerbating financial pressures on millions of Sudanese who have lost most of their income due to the ongoing conflict.

Parallel market traders told Sudan Tribune on Sunday that one dollar could be exchanged for 2,100 pounds, while Saudi riyals could be exchanged for 560 pounds and UAE dirhams for 572 pounds.

The continued decline in the value of the national currency is due to an increase in demand for foreign currencies, especially the US dollar and the riyal, while supply is in short supply.

One black market trader revealed that most Sudanese were seeking foreign currency due to lack of domestic demand, so the instability of the pound caused him to stop operations to avoid losses.

The Bank of Khartoum offered to buy dollars at 1,860 pounds and sell them at 1,873 pounds, while it offered to buy Saudi riyals at 501.49 pounds and sell them at 505.25 pounds.

The parallel market has been moved from the capital, Khartoum, to Port Sudan, where the army has set up a base to run state affairs.

The depreciation of the Sudanese pound is expected to further erode the purchasing power of Sudanese, most of whom now rely on remittances from overseas as livelihoods such as agriculture have been destroyed across vast swathes of Sudan.

Economic expert Mohamed Nayyel told Sudan Tribune that while the national currency was expected to depreciate during the war, the government’s inaction in addressing the issue was worrying.

Nayel urged the authorities to take steps to stop the currency from depreciating, such as withdrawing large-denomination pounds from circulation, restricting imports of luxury goods, promoting exports, rationalizing public spending and increasing revenue.

On February 26, Finance Minister Jibril Ibrahim reported that state revenues had plummeted by more than 80 percent.

Mohammed Nayyar stressed that 95% of the money supply is held by the public, which exacerbates the imbalance in the parallel currency market and requires urgent intervention.

On April 15, 2023, before the conflict between the Syrian army and the Rapid Support Forces broke out, the exchange rate of the pound to the US dollar was 570.