{"id":61888,"date":"2026-06-29T12:21:33","date_gmt":"2026-06-29T09:21:33","guid":{"rendered":"https:\/\/sudanevents.com\/?p=61888"},"modified":"2026-06-29T12:21:33","modified_gmt":"2026-06-29T09:21:33","slug":"the-decline-in-the-exchange-rate-and-the-speculators-dilemma","status":"publish","type":"post","link":"https:\/\/sudanevents.com\/index.php\/2026\/06\/29\/the-decline-in-the-exchange-rate-and-the-speculators-dilemma\/","title":{"rendered":"The Decline in the Exchange Rate and the Speculators\u2019 Dilemma"},"content":{"rendered":"<p><span style=\"color: #ff0000;\"><strong>As I See\u00a0<\/strong><\/span><\/p>\n<p><span style=\"color: #ff0000;\"><strong><em>Adil El-Baz<\/em><\/strong><\/span><\/p>\n<p><span style=\"color: #ff0000;\"><strong>1. Stability in the Parallel Market and a Decline in the Exchange Rate<\/strong><\/span><\/p>\n<p><strong>The parallel foreign exchange market experienced notable stability during the first week, followed by a sustained decline in exchange rates at the beginning of the second week. This shift resulted from a series of effective and stringent measures adopted by the Central Bank of Sudan. These measures extended beyond monetary policy to encompass all factors directly influencing the exchange rate.<\/strong><\/p>\n<p><strong>This is the first time a coordinated package of economic measures has been implemented in such a manner and produced positive results within a relatively short period.<\/strong><\/p>\n<p><span style=\"color: #ff0000;\"><strong>Oil Sector Reforms and Their Impact on the Exchange Rate<\/strong><\/span><\/p>\n<p><strong>The reforms began with changes to policies governing the petroleum sector, particularly the importation of petroleum products. This sector has long been the single largest driver of exchange rate fluctuations because of the substantial amounts of foreign currency required by importing companies to meet their external obligations.<\/strong><\/p>\n<p><span style=\"color: #ff0000;\"><strong>Measures Introduced in the Petroleum Sector<\/strong><\/span><\/p>\n<ul>\n<li><strong>Ending the group-import system: This system had previously prompted companies and incoming fuel shipments to compete aggressively for dollars in the parallel market, regardless of price. As a result, the exchange rate rose to unjustified levels that bore little relation to actual demand within the country.<\/strong><\/li>\n<li><strong>Cancellation of import permits: All import authorizations previously issued through the Ministry of Energy\u2019s \u201cBaladna\u201d platform were revoked.<\/strong><\/li>\n<li><strong>Unified monthly pricing: Authorities agreed to announce a single monthly price for petroleum products. Previously, pricing was determined on a shipment-by-shipment basis, creating confusion and instability in the market. The new pricing structure, introduced at the beginning of July, is adjusted monthly according to international market conditions and domestic variables, with strict oversight and firm penalties for non-compliance.<\/strong><\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>Additional Measures by the Central Bank<\/strong><\/span><\/p>\n<p><strong>The Central Bank of Sudan introduced further requirements for companies seeking to import petroleum products:<\/strong><\/p>\n<ul>\n<li><strong>Financial qualification requirements: Importers must demonstrate sufficient financial capacity, including depositing 200 kilograms of gold with the Central Bank in order to obtain an import license.<\/strong><\/li>\n<li><strong>Utilization of export proceeds: Qualified companies are now permitted to use their own export earnings to finance imports, thereby reducing pressure on the parallel foreign exchange market.<\/strong><\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>Foreign Currency Injection and the Role of Commercial Banks<\/strong><\/span><\/p>\n<p><strong>To ensure the sustainability of the new policies, the Central Bank injected foreign currency into commercial banks to meet customer demand and prevent businesses from resorting to the parallel market.<\/strong><\/p>\n<p><strong>The Bank announced that currency injections would continue and that all requests from both public and private sector entities had been fulfilled through commercial banks at a rate of 1,220 Sudanese pounds per UAE dirham. Prior to the intervention, the dirham had reached 1,500 pounds in the parallel market before gradually declining to 1,220 following the injections. Officials expect the rate to fall below 1,000 pounds in the near future.<\/strong><\/p>\n<p><span style=\"color: #ff0000;\"><strong>An Important Observation<\/strong><\/span><\/p>\n<p><strong>Some major commercial banks did not apply for foreign currency from the Central Bank because they already possessed sufficient export proceeds. This suggests that certain banks had been engaged in currency speculation\u2014arguably the hidden element in Sudan\u2019s exchange-rate story.<\/strong><\/p>\n<p><span style=\"color: #ff0000;\"><strong>The Speculators\u2019 Current Dilemma<\/strong><\/span><\/p>\n<p><strong>Speculators are betting that the Central Bank will be unable to sustain its foreign currency injections. However, expectations regarding future financial inflows suggest otherwise, particularly in light of:<\/strong><\/p>\n<ul>\n<li><strong>Gold-related agreements with the Sultanate of Oman;<\/strong><\/li>\n<li><strong>Financing facilities from Sahara Bank and Nizwa Bank, in addition to funding lines secured by some companies from Bahrain;<\/strong><\/li>\n<li><strong>The return of financing arrangements from Qatar Islamic Bank and the National Bank of Qatar for selected commodities backed by gold guarantees;<\/strong><\/li>\n<li><strong>The substantial gold reserves currently held by the Central Bank, which can be monetized if necessary.<\/strong><\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>The Choices Facing Speculators<\/strong><\/span><\/p>\n<p><strong>Speculators now face a difficult decision:<\/strong><\/p>\n<ul>\n<li><strong>Should they rush to sell their foreign currency holdings, increasing market supply and accelerating the decline in exchange rates?<\/strong><\/li>\n<li><strong>Or should they continue betting against the Central Bank and risk even greater losses in the future?<\/strong><\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>Central Bank Measures Concerning Gold<\/strong><\/span><\/p>\n<ul>\n<li><strong>Purchasing gold at market prices: The Central Bank purchases gold from companies and the open market at international market rates. According to the director of Luna Company, the Bank purchased 21-carat gold yesterday at a price of 580 pounds.<\/strong><\/li>\n<li><strong>Limiting profits in the petroleum products sector: Buying gold for export has become less attractive after profit margins on petroleum products were restricted through a pre-announced pricing mechanism.<\/strong><\/li>\n<\/ul>\n<p><span style=\"color: #ff0000;\"><strong>Liquidity Injection and Prospects for Economic Stability<\/strong><\/span><\/p>\n<p><strong>The Central Bank has injected carefully calibrated liquidity into the market without triggering inflationary pressures. The objective is to stimulate the gold market and provide financing for the agricultural season.<\/strong><\/p>\n<p><span style=\"color: #ff0000;\"><strong>Looking Ahead<\/strong><\/span><\/p>\n<p><strong>Current indicators suggest that this package of measures is producing successive gains. If these achievements continue over the coming weeks, they could lay the foundation for long-term stability in the petroleum products market, the gold sector, and the foreign exchange market. Such stability would also create an opportunity to address structural imbalances in Sudan\u2019s trade balance and balance of payments on a more sustainable basis.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As I See\u00a0 Adil El-Baz 1. Stability in the Parallel Market and a Decline in the Exchange Rate The parallel foreign exchange market experienced notable stability during the first week, followed by a sustained decline in exchange rates at the beginning of the second week. This shift resulted from a series of effective and stringent &hellip;<\/p>\n","protected":false},"author":2,"featured_media":58017,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-61888","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion"],"_links":{"self":[{"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/posts\/61888","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/comments?post=61888"}],"version-history":[{"count":1,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/posts\/61888\/revisions"}],"predecessor-version":[{"id":61889,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/posts\/61888\/revisions\/61889"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/media\/58017"}],"wp:attachment":[{"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/media?parent=61888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/categories?post=61888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/tags?post=61888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}