November 10, 2016 (KHARTOUM) - The Sudanese pound (SDG) on Friday has hit another historic low against the U.S. dollar on the black market since Central Bank of Sudan (CBoS) has partially floated the exchange rate, last week.
- A worker counts US dollar bills inside a money changer in the Sudanese capital, Khartoum (Photo: Reuters)
Last week CBoS introduced an incentive policy and increased the exchange rate in commercial banks and exchanges by 131%. As a result, the US dollar exchange rate went up in banks to 15.8 SDG in comparison with to the official rate of 6.5 SDG.
The exchange rate of the dollar went up to 17.6 Sudanese pounds in the black market on Friday while it was at 15.6 SDG last week when the central bank introduced new policy.
On Friday, black market traders told Sudan Tribune that the new incentive policy did not affect the market despite increasing the official exchange rate to 15.95 SDG which was similar to the back market prices.
CBoS expected that the incentive policy would help attracting Sudanese expatriates to sell their savings to the official banking institutions.
“Last week dollar traders stopped selling completely but continued buying,” said Ahmed a black market trader, adding that black market traders have waited to understand the impact of the new CBoS policy.
The black market trader noted that the banks were not able to attract expatriates’ remittances during the whole week, as the exchange rate in back market went up.
“We expect that Sudanese pound to continue dropping against foreign currencies because the central bank has no sufficient reserves of hard currency to control the exchange rate,” the trader said.
He added that expatriates have no trust in the CBoS and prefer to transfer their money through the black market which offers interesting rates.
Las week, the Ministry of Finance has expected that the new CBoS policy would help attracting $ 4 billion of the expatriates’ financial transactions, which is mainly used to be channeled through black market.
Black market traders expected that US exchange rate might reach 20 SDG within two weeks.
Security authorities usually monitor exchange rate in black market when it goes up and arrest traders for some time before to release them.
In the past, the CBoS governor called to try the black market traders.
Last February, the minister of finance pointed that dollar exchange rate in black market must not exceed 7 SDG, saying the hike is caused by traders’ speculations.
The Sudanese pound dropped down after South Sudan seceded in 2011, as the north Sudan lost three-quarters of oil output, the main source of foreign currency used to support the Sudanese pound and to pay for food and other imports.