Banking Expert Dr. Louay Abdul Monggeim to (Sudan Events)

Interview – Rehab Abdullah

The pound’s battle with the dollar is a battle for a nation that refuses to collapse
The quick antidote to the economic and banking crisis lies in expatriate remittances and the issuance of the “gold pound”
There is a party that has an interest in continuing open imports and wants the economy not to recover
Banking expert Dr. Louay Abdul Moneim attributed the collapse of the value of the Sudanese pound to several reasons, most notably the militia war. However, he pointed out that there were previous factors that led to the decline in the value of the pound. The expert criticized the continued leaving the door to imports open without controls, and accused parties – which he did not name – of having an interest in This is for the purpose of destroying the economy, and he stressed in an interview with (Sudan Events) the necessity of establishing new import controls to reduce pressure on the dollar.
The banking expert sent a message to expatriates to support the national economy, and also renewed his proposal for the gold pound.
How do you view the rise in the price of the dollar to an unprecedented number and the reason for the rise?
I start by pointing out that in January 2022 the dollar was 450 pounds. In March, the Ministry of Finance wanted to increase revenues to fill the budget deficit, so it lifted subsidies on fuel and electricity, and the policy of floating the pound coincided with it. It had disastrous effects on the economy at the time and it is still suffering from it. Now, in addition to the great and permanent danger that the economy is still facing, which is ill-considered importation, and this is a danger that leads to great pressure on the dollar in the parallel market, we made a mistake in the past and still do, and therefore we must pay attention to that, and it is noted that this door is still open, and it seems that there is There is a party that has an interest in this and wants the economy not to recover, and this rise in the dollar continued until January 2023, reaching the limits of 581 pounds, and one day before the war it reached 607 pounds, and after the start of the war, the government was “excused” and began to compete in the markets to buy weapons with dollars and to finance new contracts to buy weapons to strengthen Its system is facing brutal forces supported by superpowers, mercenaries from 8 countries, and high-quality weapons. The government had to search for all possible materials in order to buy weapons and be able to resist foreign invasion. The government continued to speculate while the dollar rose and the pound fell until January 2024. The ceiling reached 1,100 pounds, then the Ministry of Finance announced an increase in the customs dollar from 650 to 950 pounds to confront the decline in revenues, which reached 80%. After that, it is a natural thing for the parallel market to rise and the local banks are trying to chase it, despite there being a gap between them of about 100 pounds in price. Now it has reached 1,580 to 1,600 pounds.

How can the value of the pound be strengthened?
We need to pump deposits into the central bank from friendly countries to obtain dollars and many procedures.
In your opinion, to what extent did the war affect the value of the pound?
The truth is, the extent of the damage that befell the Sudanese economy as a result of the war is very large, and the systematic targeting of state resources and infrastructure, even the citizen, and unfortunately it was part of the battle in its economic aspect, is no less ferocious than the military aspect, because it is clear that the countries that support the rebellion were keen to target all the large institutions in The first day of the war, which led to the destruction of 100 bank branches, the destruction of 14 central markets in Khartoum State, and this led to the bankruptcy of 22 thousand merchants, in addition to the destruction of 550 factories in Bahri and Omdurman only, and this led to the displacement of 250 thousand workers, and as a result the banks declined very significantly. In the first days, it closed its doors and a very large number of citizens migrated, and 8 million were displaced to safe areas due to the killing of 12,000 civilians. Therefore, as a direct impact of this war, the cultivated areas declined by 60%, while exports declined by 60%, and local trade stopped by 70%. This led to the government’s inability to pay salaries increased by 50%. Analysts and observers estimated the total losses at around 200 billion dollars. Therefore, the government decided to raise the customs dollar in order to perhaps compensate for part of its losses.
The government has taken measures…what specifically…and are they sufficient?
The measures taken by the government were to reopen the banks again, 427 branches returned to their activities, connecting 23 banks to the network, and returning 8 banking applications to work. This is a great achievement. They succeeded in restoring the SWIFT service, which is a very important service for foreign transfers, and they restored the Siraj system.
But they didn’t bring the electronic clearing back to work?
They do not have a problem from a technical standpoint, but from an objective standpoint, if it were returned now, there is trading that focuses on one or two applications, which may lead to many customers preferring to transfer their accounts from one bank to another, and thus will lead to losses for a large number of banks, so it is most likely that this is the case. The reason for the laxity towards this problem, and in general, banks are moving towards recovery, and most importantly, restoring the SWIFT service because they depend on remittances from expatriates.
It is evident that among the measures is to set a ceiling on transfers through banking applications to limit thefts in that they were targeting banks and citizens, so it became 3 million for ordinary customers per day and 50 million per month, and for premium customers 5 million per day and 100 million per month. Perhaps this measure is sound, but we need some kind of reduction. .
You are calling for attracting the savings of expatriates…but it seems that the matter requires incentive measures?
We look forward to issuing a revolutionary decision requiring any Sudanese expatriate whose monthly income exceeds $1,000 to transfer $500 annually through the banking system. He has the right to receive it in cash in the same currency, and the renewal of passports and exit visas will be linked to proof of the transfer via a certified account statement.
How is the economy stimulated?
The participatory economy can contribute to stimulating the economy, and the idea of the participatory economy is summed up in offering goods (tangible assets) for public use through electronic applications that are downloaded via smart phones, where the user allows a special code for the application to be visible on the product, Such as a wheel or a copy device, and once he uses it, a small amount is deducted from his bank balance linked to the phone. Perhaps the ease of the sharing economy technology and the speed of its spread has prompted many investors to pump significant amounts of money into this sector, and the sharing wheels were the beginning. When the mobile phone is used to pay via By scanning the code, money is circulated within the banking system, in addition to ease of payment, and thus the service sector flourishes, with the possibility of investing in small amounts, such as a machine for measuring weight and height or measuring blood pressure… The sharing economy would save huge amounts of money that were spent without the need for them and direct them to… Real estate investment, for example, or small projects. The sharing economy is widespread in many countries of the world, especially China, and has attracted billions of dollars, amounting to $500 billion in China alone in 2016, and this sector is growing by 40% annually.

You had a proposal for a gold savings pound restricted to circulation within and between Sudanese banks?
Starting, it is important to clarify that minting is the inscription and formation of the minted currency, and in my proposal it is within the powers of the Bank of Sudan, which is responsible for selling the minted gold pound through windows in the main branches of the banks on specific days for subscription. As for the instrument, it is a negotiable title deed that is signed by The buyer, the customer, and the seller accepted the Bank of Sudan, pursuant to a power of attorney from the customer to the bank, to buy and sell based on an order from the customer, in exchange for a commission to the bank. The most important step, in my opinion, that will make a big and immediate difference when implemented is investing in the gold savings pound that I proposed in early February 2018, which would revive the banks again because it would turn them into a gold exchange and return the cash mass to the banks to invest in minted gold currencies that are transferable within the bank or between banks from account to account or for liquidation upon request at the global stock exchange price.
What is the method of implementing the product?
Firstly, the Bank of Sudan is the one who monopolizes the issuance of the gold pound instrument and sells it through a window inside the main branches of the banks, Head Quarters. Secondly, gold is purchased starting from the Bank of Sudan by printing a new currency until sufficient liquidity is available in the banks and then by borrowing from the banking system. Thirdly The bank cannot finance the purchase of the gold pound due to Sharia considerations, but it profits from being an agent for clients in buying and selling the gold pound in exchange for a lump sum. Fourth, the gold pound achieved profits that reached 4% quarterly and 11-15% annually against the dollar, according to the indicators of the International Gold Exchange and analysis. Daily FX in 2017 and 2018, and gold is expected to reach a record value in 2024, and the optimistic expectations are due to a trend by the US Federal Reserve Bank and many other banks that have actually begun to reduce interest rates, and the monetary policy has shifted to a kind of easing and the consequences of that due to the weakness of the dollar. The relationship between gold prices and interest rates is usually inverse, and as interest rates decline, gold becomes more attractive compared to other investments such as stocks and bonds, which offer lower returns in a turbulent environment that witnesses a decline in interest rates. Therefore, the saying that gold is for purchase and not for sale has become an established truth among investors in the international gold exchange. The proposal serves as an antidote to the inevitable collapse of banks, especially during or after the war, which greatly harmed the economy, leaving it like a dying patient neglecting the only treatment for him.. the pound. The gold coins are actually a guarantee in the event of a bank bankruptcy, as it returns to its owner. It also represents a guarantee for obtaining banking facilities. The strong, globally accepted guarantees are based on Tangible Asset. It is also an opportunity for the government and banks to invest in it, as well as for miners to sell their production instead. About smuggling it abroad.. The proceeds of purchasing the gold pound in the subscription are transferred to the Bank of Sudan and the proceeds of the sale are transferred to the customer’s account in the bank.. If the bank wants to invest a percentage of the deposits in financing, this should not be in financing individuals, which is characterized as medium and long-term. However, it is employed in financing companies for a period ranging from 3 to 6 months. Also, the demand for purchasing the savings gold pound to preserve money from erosion and investing in the rise in the value of gold globally would limit the demand for the dollar outside the need for imports. Similarly, financing Banking deposits are secured by statutory reserves.
In your opinion, is the current timing appropriate to implement the gold pound proposal?
The erosion of people’s money and the profits from deposits in banks necessitate the implementation of my proposal regarding the gold savings pound, which is restricted to circulation within banks. Perhaps I am surprised whether the proposal did not reach the decision-makers, or whether there are those who reject it because they were unable to find solutions on their part.
Specifically, what is the purpose of the gold pound?
In fact, it is a mistake to believe that the saving gold pound is merely a hoarding of gold and will not contribute to development, and that its purpose is only to increase the volume of savings and reduce the demand for the dollar… First, the total value of the gold pound accounts in banks should be dealt with as the total value is dealt with. The value of current accounts, i.e. employing a percentage of them determined by the Bank of Sudan in financing industrial and agricultural development projects by guaranteeing the banks’ cash reserves. Second, it will activate and increase the resources of the Zakat Chamber to a great extent because it represents the money of merchants, since the Bureau currently focuses on deducting employees’ salaries only, which is limited, and since the gold pound is a fixed resource for the Bureau when the year is transferred to these accounts, it will support the Bureau’s efforts in reducing poverty, similar to microfinance. Third, in addition to that, banks will tend to buy the gold pound to preserve the value of their profits from erosion and thus will not compete with importers in the demand for the dollar in the market…
Time is money. The Sudanese government must gain precious time and expedite the proposed saving gold pound instrument for circulation within banks only to limit the demand for the dollar to the category of importers, while immediately reducing unnecessary imported goods and competition for local production, and launching an urgent national housing project with privileges for expatriates to stimulate the economy. Activating expatriate remittances.
What are the characteristics of the gold savings pound that I proposed in February 2018
It is not an alternative to traditional currency. Trading in it is limited within and between banks only, and it is widely spread and geographically covered.
Banks are considered a window for the Bank of Sudan to purchase and trade, and the gold pound is sold through them at the stock exchange price. Direct sales through the window take place on specific dates determined by the Bank of Sudan to issue new gold coins upon request, and this takes place in the presence of representatives from the Bank of Sudan, which has a monopoly on issuing, and the bank concerned opens accounts. Especially for the gold pound, in exchange for a lump sum commission paid to the bank in exchange for authorizing it to sell (liquefy) and buy the gold pound from representatives of the Bank of Sudan. The price of the gold pound is linked to the daily closing price on the gold exchange, which must be established as a prior step to issuing the savings gold pound and based on the indicative price. The dollar is exchanged for the Sudanese pound, which is determined by the market-making mechanism, whether in buying or selling, and this would encourage the purchasing process. The government can use it to pay the difference in international payments when exchanging trade using the internationally applicable barter system. The proposed weights are (10 and 25) grams to enable the largest possible segment of investment in it.
It can be purchased in all currencies available in the market according to the stock market index against the currencies.
Banks can employ a percentage of the total gold pound accounts determined by the Bank of Sudan as a guarantee for external financing or a facility for financing exports in exchange for legal reserves that are compensated at the end of the fiscal year by purchase from the Central Bank.
The gold pound would increase the resources of the Zakat Chamber, as it is a fixed resource that goes beyond the salaries of employees to the category of merchants and thus contributes to reducing poverty.
Its trading on the stock exchange takes place at the stage of contracting the sale for large amounts by brokerage companies, provided that the actual implementation takes place within the banks to avoid its leakage abroad.
It limits banks’ demand for the dollar in the parallel market to protect their profits from erosion, and represents an investment opportunity at the same time, especially with the decline in the value of the dollar against gold.
It is considered a bank guarantee against direct and indirect facilities.
Sudan has a relative advantage as it is one of the major producers of gold, and this in turn contributes to the continued flow of the gold pound according to the market’s need.
Why is the “Bankak” application more dominant than other applications?
To increase the trading volume in the Fawry and Omdurman National Bank applications, which are the two best-performing banks in terms of financing profits and banking operations compared to the approved Bank of Khartoum, we rely entirely on the Bankak application, which recently raised the transfer fees to 110 pounds by more than 500%, while the rest of the applications either Free or 20 pounds.. I suggest to Faisal and Omdurman National Banks that they offer an attractive offer, such as opening a current account for a brother of the same customer or his wife/husband, without a deposit requirement and without fees, with a free card if the total transfers within the bank via the application reach a specified ceiling, with prizes. A monthly cart with a random withdrawal on the numbers of deposits within the bank through the application, without a total ceiling.