Minting Gold…Providing Foreign Currencies

Report – Rehab Abdullah

Sudan has achieved gold exports amounting to 428 million dollars during the first quarter of the current year 2024, in addition to its expectations of achieving a return by the end of the current year amounting to 2 billion and 182 million dollars, in light of the extremely complex conditions of war, which led economic experts to call for the necessity of making maximum use of gold to support the national economy. .
Minting gold
The head of the Capital Markets Authority, Dr. Shawqi Azmi, renewed his refusal to sell gold, whether on the Dubai Stock Exchange or any other stock exchange, and called for gold to be minted to enable Sudan to provide free currencies to cover its needs for necessary goods as well as other needs.
Azmi explained in his speech to (Sudan Events) that minting means issuing bonds and instruments equivalent to the value of the gold that is kept in one of the banks abroad or inside the country under the supervision of the Central Bank of Sudan.
Azmi confirmed that the procedures for establishing the Gold Exchange in Sudan were halted as a result of the current war, in addition to the halt of procedures for upgrading the gold refinery in Khartoum to gain accreditation, noting that the Gold Exchange had taken many measures to carry out its work, including modifying the electronic trading system in the Khartoum Stock Exchange so that it became capable of trading gold. In addition to providing a headquarters for the stock exchange, appointing a manager for the stock exchange project, and selecting experienced and knowledgeable employees for implementation.
He expressed his hope that Sudan would soon be able to continue this activity after the causes of its disruption cease, especially since it is facing the process of rebuilding the infrastructure that was destroyed by the war machine.

Minting requirements
The economic expert, Dr. Mohammad Al-Nayer, explained that minting gold means issuing sukuks or bonds backed by gold reserves. Al-Nayer considered in his speech to (Sudan Events) that gold minting is considered one of the strongest sukuks or bonds issued, as long as it is backed by its value from the gold held by the bank. The Bank of Sudan stressed the need for there to be a clear commitment, such that there is an amount of gold in exchange for the bonds issued, equivalent to the value of the bonds. Al-Nayer stressed that this matter is indisputable and he considers it a good vision.
A number of forewarning
However, Al-Nayer pointed out that there are a number of forewarnings , including the necessity of studying the previous (Bareeq) experience, which was originally based on establishing a Fund for the gold issue, and this experience must be studied, adding that (Bareeq) was preceded by another experience of issuing sukuk or bonds in foreign currencies, pointing out that gold is minted in foreign currencies and cannot be in local currency, for the purpose of preserving its value.
Al-Nayer considered the difficulty of issuing gold bonds in light of the current circumstances, but he confirmed the possibility if the Bank of Sudan issued a certificate confirming that it had an existing quantity of gold, in exchange for which bonds were issued, and he suggested sending them to Sudanese working abroad, while emphasizing that there are profits estimated in foreign exchange, given that the instruments themselves are issued in foreign currency, in addition to the existence of promotion for them, he stressed finding a way to enable all Sudanese to contribute to this project, provided that it is actually real gold present at the Bank of Sudan and declared by the Central Bank, and instruments or bonds are issued at their actual value and can be offered for expatriates, however, Al-Nayer considered that such solutions at the present time are difficult, and he attributed this to the fact that as long as there is gold available and instruments have been issued in exchange for it, it is more important for the country to benefit from the same gold that is present at the present time until the situation improves and then build gold reserves for the next stage and Sukuk are issued at a later stage (post-war stage).
The feasibility of minting
In general, minting, according to the head of the Gold Exchange, Azhari Al-Tayeb, has an important role in monetary policy, financing the budget deficit and financing economic and social development, noting that Sudan had previously moved to find a new mechanism for purchasing gold through the issuance of government bonds funded by the public, including the issuance of the Bareeq Fund.