Sudan’s Central bank devalued its currency on Sunday, announcing a new regime to “unify” official and black-market exchange rates in an attempt to fix its crippling economy and access debt relief.
The central bank set the indicative rate at 375 pounds to the US dollar, from a previous official rate of 55 pounds. Recently, the dollar traded at between 350 and 400 Sudanese pounds on the black market.
The change is a fundamental reform demanded by foreign donors and the International Monetary Fund (IMF).
In a circular sent to banks, the central bank said it would set a daily indicative rate in a flexible managed float. The circular also set a profit margin between buying and selling prices of no more than 0.5%.
Additionally, Abdel Rahman Hassan, the central bank governor, told reporters that authorities would not control the exchange rate.
The country is now taking steps to streamline imports of strategic commodities and limit imports of non-essential goods ahead of the devaluation.
Purpose of Sudan’s Devaluation of Currency
In addition to paving the way for debt relief, the devaluation will help stabilise the currency, reduce smuggling and speculation, and attract remittances from Sudanese working overseas, the central bank said.