Pound Recovery.. Temporary Recovery or Sustainable Stability
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Report – Nahid Oshi
Following the big jump recorded by foreign currency prices, especially the “dollar” against the Sudanese pound, the recent talk about a billion-dollar deposit on its way to the treasury of the Central Bank of Sudan made the pound regain some of its health during the past two days and record a slight recovery.
Economic fragility :
Economic expert Dr. Mohamed Al-Nayer pointed out that news spreads quickly, particularly in war conditions, and said that the fragility of the economy makes news affect quickly, and the Sudanese pound was affected during a short period of time by a large, unprecedented, unjustified and unreal decline.
In contrast, there was a positive impact during the past few days due to talk about the billion-dollar deposit, which certainly has a positive impact on the exchange rate.
Economic war:
Economic expert Dr. Awad Allah Musa spoke about the slight recovery in the value of the Sudanese pound against foreign currencies, particularly the dollar, which witnessed a decline to (2500) pounds. He said in his interview with “Sudan Events ” that the jump recorded by the dollar, exceeding all limits, is illogical, objective, impractical, and not linked to economic causes. Therefore, it is natural for it to decline because it was made by speculators and owners of an “economic war” agenda from some external parties.
He added, “Therefore, with a few treatments, it disappears with the disappearance of the influencer, and this is what happened. The state and the competent authorities took measures against speculators and parties with external connections in the demand for the dollar, which led to a gradual decline in the dollar to what it was previously.”
He added, “It is known to everyone that the price of the dollar is always determined by banking procedures in the Bank of Sudan (the official price), and there is a slight difference between the official and parallel price.” Temporary Recovery:
Economic expert Dr. Haitham Mohamed Fathi said that the recovery of the Sudanese pound during the current week may be temporary and not sustainable, adding, “Therefore, we must wait to see where the price of the pound is heading during the remaining transactions of this week and next week.
Perhaps the foreign amounts that increased demand last week will run out and then the parallel market will regain the initiative or the opposite will happen and supply will increase, which is possible, particularly since the government solutions that have been implemented may be emergency and not radical.” He said that the country has not received external support with a decrease in exports and an increase in demand for foreign currency from the parallel market to meet the import of petroleum products after the oil pipeline was stopped, in addition to the decline in local production due to the war.
He attributed the sudden decline in the Sudanese pound against foreign currencies to the government’s lack of effective monetary policy tools to address these fluctuations and direct intervention in exchange rates in the current circumstances, especially with the halt in production and the rise in unemployment rates. The demand for hard currency becomes necessary to finance war expenditures, which increases pressure on the Sudanese economy.
He added, “Therefore, in my estimation, the government, to cover the deficit in foreign exchange resources, worked to buy foreign currency from other sources to meet the import of necessary goods and services, so speculators and crisis traders took advantage of the opportunity.”
He added, “What was rumored about a Qatari deposit had an impact on the black market, because yesterday, immediately after the announcement of the deposit, the dollar price fell in the parallel market.
Even if the talk about Qatari support is a rumor, the rise in currency prices will be greater in the coming days.” Deterrent Provisions:
Regarding radical treatments, Mohamed Al-Nayer affirmed the need for the state to adopt many policies and not rely only on the deposit, but rather it must adopt a number of policies that would stop the deterioration of the value of the pound by working to rationalize imports and import only necessary and basic goods and increase exports, particularly gold, to reduce smuggling and benefit from it in the economy in a complete manner, which would reduce the deficit in the trade balance, in addition to working to rationalize public spending in the state’s general budget and increase the volume of revenues to reduce the deficit in the internal balance “the state’s general budget” and work to control the monetary mass and banking and monetary policies to limit the deterioration.
These policies must also be completed with legal procedures so that there are deterrent provisions for those dealing in currency trading in the parallel market.
He said, “These factors, with the presence of indicators of a deposit at the Central Bank, can lead to an improvement in the value of the Sudanese pound against foreign currencies, and the state’s policy and its effectiveness remain to maintain the stability of the exchange rate or improve the value of the Sudanese pound during the next stage.
While Dr. Awad Allah warned of the need to tighten economic security measures addition to continuing the flexible offering by the Central Bank of Sudan CBS to demand the dollar, provided that it continues Policies and procedures for activating the state’s trade balance (exports and imports) to ensure the stability of the dollar price.