Official Calls for Coordination Between Fiscal and Monetary Policies to Ensure Effectiveness of New Banknotes
Sudan Events – Rehab Abdullah
The spokesperson for the Ministry of Finance and economic expert, Dr. Ahmed Al-Sharif, questioned the Central Bank of Sudan’s recent circular announcing the issuance of a new SDG 2,000 banknote and a second print of the SDG 500 note, claiming it would help achieve economic stability.
He asked, “How can that be achieved while the country is at war, operating under an emergency budget, and with 70% of the money supply outside the banking system?”
Dr. Al-Sharif explained that issuing new currency means printing more banknotes, which inevitably fuels inflation. “As long as printing continues, inflation will persist, market prices will remain high, and the exchange rate will continue to rise,” he said.
Speaking to Al-Ahdath, he stressed that the Central Bank and the Ministry of Finance must coordinate their fiscal and monetary policies, control the money supply, and manage gold exports effectively for the new currency to have any tangible impact on the economy.
Al-Sharif added that the decision to issue new currency at this time requires serious reconsideration, as the state is currently engaged in war against the Rapid Support Forces (RSF) militias. He noted that the government urgently needs any available foreign currency to finance the war effort. The cost of printing new notes and withdrawing old ones, he warned, would place additional financial burdens on the state, likely forcing it to borrow from the banking system — a move that would further exacerbate inflation already worsened by the war and declining productivity.
He emphasized that one of the main objectives of issuing new currency is to assess the amount of cash circulating outside the banking sector. However, he recalled that a similar attempt during the introduction of the SDG 1,000 note faced major obstacles due to security instability across several states, preventing many citizens from reaching banks. Consequently, the Central Bank failed to accurately determine the real size of the money supply, which hindered its ability to craft effective monetary policies to curb inflation and restore balance between money supply and demand.
Dr. Al-Sharif concluded that the decision was ill-timed and unlikely to achieve its intended goals amid the prevailing insecurity and instability.
