{"id":61894,"date":"2026-07-10T20:53:07","date_gmt":"2026-07-10T17:53:07","guid":{"rendered":"https:\/\/sudanevents.com\/?p=61894"},"modified":"2026-07-10T20:53:07","modified_gmt":"2026-07-10T17:53:07","slug":"the-central-bank-of-sudan-has-regained-the-initiative-but-are-banks-ready-for-the-battle-of-economic-reconstruction","status":"publish","type":"post","link":"https:\/\/sudanevents.com\/index.php\/2026\/07\/10\/the-central-bank-of-sudan-has-regained-the-initiative-but-are-banks-ready-for-the-battle-of-economic-reconstruction\/","title":{"rendered":"The Central Bank of Sudan Has Regained the Initiative\u2026 But Are Banks Ready for the Battle of Economic Reconstruction?"},"content":{"rendered":"

By Mohannad Awad Mahmoud<\/strong><\/span><\/p>\n

Over the past period, we have written extensively about the challenges facing the Sudanese economy and the need to transition from an economy dependent on imports and consumption to one driven by production, exports, and value addition. We have also discussed the impact of taxes and levies on the competitiveness of Sudanese products, as well as the importance of removing distortions that limit the country\u2019s ability to attract foreign currency. However, recent developments open another avenue for discussion\u2014one that may receive less attention but is no less important: does Sudan possess a banking sector capable of leading the recovery phase?<\/strong><\/p>\n

Recent decisions by the Central Bank of Sudan indicate a clear shift in the management of monetary policy. The bank is no longer content with merely observing the market from a distance; it has begun to use its tools to regain the initiative, from injecting foreign currencies through the banking system to regulating the gold market, reviewing electronic payment systems, and reorganizing the flow of money within the economy. These measures have achieved an important outcome by breaking the wave of speculation and restoring a measure of confidence in the banking sector. Yet economic experience teaches us that the success of a central bank is measured not only by its ability to intervene during crises, but also by its capacity to rebuild a banking system capable of functioning once such interventions come to an end.<\/strong><\/p>\n

An economy cannot be managed indefinitely through central bank decisions alone. While the central bank formulates policies and establishes regulations, it is commercial banks that transform these policies into real economic activity. This raises the most important question: where do Sudanese banks stand today in relation to this new phase?<\/strong><\/p>\n

In any modern economy, a commercial bank is not merely a building for safeguarding money, a window for receiving remittances, or an institution for buying and selling currencies. Rather, it is the heart that pumps blood through the body of the economy. Banks collect small savings and convert them into major projects, assess risks, finance productive sectors, and move capital from vaults to factories, from dormant accounts to farms, and from figures in ledgers to jobs and genuine economic growth.<\/strong><\/p>\n

However, over many years\u2014and under the pressures of inflation, currency depreciation, war, and instability\u2014the natural role of many banks has diminished. Managing daily liquidity has become more prominent than financing development, while avoiding risk has often taken precedence over creating opportunities. Such caution may be understandable under exceptional circumstances, but it is ill-suited to a period of national reconstruction.<\/strong><\/p>\n

At the same time, calls for commercial banks to return to their traditional role in financing the economy must also take into account the magnitude of the challenges faced by the banking sector itself during the years of conflict. Banks have not been immune to the effects of the crisis. They have come under significant pressure, including the loss of some assets, the disruption of branches, the financial distress of many clients, the deterioration of financing portfolios, and the decline in the value of collateral. Rebuilding the role of banks, therefore, is not simply a matter of demanding increased lending; it also requires strengthening their financial positions and improving risk-management tools, because a weak bank cannot finance a strong economy.<\/strong><\/p>\n

Today, as the Central Bank of Sudan takes steps to redirect financial transactions and cash flows into official channels, the greatest challenge lies not merely in bringing liquidity into banks, but in determining what banks will do with that liquidity. Money held within financial institutions will remain little more than numbers unless it is transformed into productive financing. Deposits that do not become operational factories, productive farms, and expanding exports will not alter the economic reality.<\/strong><\/p>\n

This broader perspective also helps explain the Central Bank\u2019s recent measures concerning the management of the money supply and the regulation of circulating banknotes. The issue is not simply one of currency entering or leaving the market; rather, it is an attempt to regain control over real liquidity, reduce the influence of the parallel economy, remove counterfeit or questionable banknotes from circulation, and strengthen the link between financial activity and the formal banking system.<\/strong><\/p>\n

Yet the success of these measures cannot be achieved merely through currency regulation. It will only be complete when funds within the banking system are transformed into genuine financing for production. The real test is not the volume of deposits held by banks, but their ability to convert those deposits into economic activity.<\/strong><\/p>\n

This is where a new discussion must begin between the Central Bank of Sudan and commercial banks regarding the redefinition of the banking sector\u2019s role in the coming phase. The future requires banks that do not merely wait for customers, but actively seek opportunities and develop risk-management frameworks capable of financing production rather than avoiding it.<\/strong><\/p>\n

A post-war Sudan will need more than money; it will need institutions that understand how to use money effectively. There is a fundamental difference between liquidity and financing: liquidity is money that exists, whereas financing is an economic decision that transforms money into value.<\/strong><\/p>\n

This is also where the importance of digital transformation in the banking sector becomes evident\u2014not merely as mobile applications, but as a new foundation of trust between citizens and the financial system. People will not return to banks simply because policies have been announced; they will return when they find services that are accessible, secure, and efficient, and a system that safeguards their money and meets their needs. Traders will not abandon cash transactions unless they encounter a more effective payment system, and investors will not commit capital unless they can rely on a dependable banking sector.<\/strong><\/p>\n

For this reason, banking reform today is not merely a financial matter; it is an essential component of rebuilding the national economy. In recent days, the Central Bank of Sudan has demonstrated that well-coordinated intervention can influence markets and that confidence can return when economic actors perceive clear leadership. But the next phase will be more difficult.<\/strong><\/p>\n

The exchange rate may decline through intervention, but currency stability can only be achieved when the banking sector becomes a driver of production.<\/strong><\/p>\n

The next battle will not be fought solely in the foreign exchange market; it will unfold within banks themselves\u2014in financing decisions, risk management, and the ability to convert savings into investment.<\/strong><\/p>\n

The Central Bank of Sudan has begun to regain the initiative, and the ball has now passed to commercial banks. They must choose whether to remain institutions that merely safeguard money or evolve into institutions that help shape the future.<\/strong><\/p>\n

Ultimately, the strength of a currency does not derive from the amount of money stored in vaults, but from an economy\u2019s ability to transform that money into production and wealth.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

By Mohannad Awad Mahmoud Over the past period, we have written extensively about the challenges facing the Sudanese economy and the need to transition from an economy dependent on imports and consumption to one driven by production, exports, and value addition. We have also discussed the impact of taxes and levies on the competitiveness of …<\/p>\n","protected":false},"author":2,"featured_media":50485,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-61894","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\/61894","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=61894"}],"version-history":[{"count":1,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/posts\/61894\/revisions"}],"predecessor-version":[{"id":61895,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/posts\/61894\/revisions\/61895"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/media\/50485"}],"wp:attachment":[{"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/media?parent=61894"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/categories?post=61894"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sudanevents.com\/index.php\/wp-json\/wp\/v2\/tags?post=61894"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}