Exchange Rate Regime Change in Sudan

Sudan devalues its currency in order to apply for a debt suspension.

Exchange rate regime change in Sudan. The Central Bank of Sudan lowered the currency's value by combining the exchange rate on the official and black market on Sunday to apply for a debt suspension. The change was requested by the International Monetary Fund (IMF), but due to the shortage of essential goods and the rate of increase in inflation, the plan could be implemented with a delay of several months. The Federal Reserve raised the exchange rate from 55 Sudanese pounds per dollar to 375 Sudanese pounds per dollar. A US dollar on the black market is valued around 350-400 Sudanese pounds. In a note sent to the banks, it was stated that the central bank will set a rate daily and follow a mixed exchange rate regime with flexible governance. In this way, banks will be able to buy and sell foreign currency for 5 percent more or less than the specified rate. Speaking about the changes, Sudan Central Bank Governor Muhammed el-Fatih Zeynelabidin said, "This decision is not a full floating exchange rate regime, but a flexible management policy." Some economists stated that this change in the exchange rate regime will not affect inflation because all transactions are already made on the black market. Within the scope of the IMF monitoring program, the exchange rate change was expected to be made in 2020 and Sudan's foreign debt of 60 billion dollars was expected to be postponed, but the program was shelved for a while due to political uncertainties.     Source: Bloomberg HT