An Economist Determines How to Stop Deterioration of the Pound

Sudan Events – Nahid Oshi

Economist Dr. Adel Abdul Aziz said: The decline of the Sudanese pound against foreign currencies by 12% within a short period portends an economic disaster.
He attributed the deterioration of the value of the pound to the large gap in the trade balance between the need for foreign exchange for imports and the available foreign exchange resources.
Speaking to (Sudan Events), he said that Sudan needs to import petroleum products, fertilizers, pesticides, foodstuffs such as wheat, flour, sugar, vegetable oils, devices, equipment, means of transportation, medicines and medical preparations at more than 11 billion dollars, while exports include gold, sesame, live animals, cotton and peanuts. The total amount of Gum Arabic is around 4.4 billion dollars, indicating that the deficit in the trade balance amounts to 6.7 billion dollars.
He added, “The following are other resources that can reduce the impact of this deficit and be counted within the balance of payments, which are foreign loans and aid, immigrant remittances, revenues from using Sudanese airspace, southern oil traffic fees, and others. These have diminished to a great extent due to the war,” and he added. “So the Bank of Sudan became unable to cover import needs, so the only solution to cover import needs was to buy foreign currency from the local market or from exporters or immigrants, and here the door was opened for speculation in the dollar by currency traders and crisis traders.”
Abdul Aziz denied that the (Bankak) application caused the collapse of the value of the pound. He said that the reasons for the collapse were structural, but he pointed out that the ease of transferring through Bankak and the concentration of Sudanese accounts in it facilitated the operations of speculators.
He called for the necessity of issuing decisive sovereign decisions to use the Chinese Yuan and the Russian Ruble in trade exchange operations, provided that it is part of strategic understandings with these two countries, including the activation of the strategic agreement with China signed in 2013 and renewed in 2017, which includes opening Sudanese banks in China and Chinese banks in Sudan, and signing a similar agreement with Russia, Sudan’s gold exports will be allocated to these two countries.
In addition to the importance of obtaining dollar deposits for the Central Bank from both Qatar and Saudi Arabia. Signing agreements to import petroleum products with Algeria, Saudi Arabia and the Sultanate of Oman in exchange for exports of meat, live animals, sesame and fodder.
In addition to activating the use of the accounting dollar in trade with sister Egypt, and tightening control over the common borders to prevent smuggling.
Below is the technical treatment. Abdul Aziz proposed activating economic security operations against currency speculators by monitoring them as well as confiscating their accounts under the emergency law, and for the Bank of Sudan to oblige the Bank of Khartoum to set a ceiling on transfers in your bank’s system, provided that multiple accounts owned by one party are followed up by compliance officials at the Bank of Sudan and the Bank of Khartoum according to the powers granted to them under the Anti-Terrorism and Anti-Money Laundering Law, while working to restore the data and work of EBS (Electronic Banking Services Company), which unified electronic banking operations under one technical umbrella.