Pound plunge and Capitals escape

Yousif Siraj
The currencys value was not unlikely to be adversely affected by the ongoing war, which is proceeding to complete eight months. It is undoubtedly disastrous for Sudans already fragile economy because of the heavy policies pursued by successive Governments, and the most confusing of those pursued by the ousted Omar al-Bashir Government in 30 years, which has not ended in a strong economic structure despite the multiple incomes of oil and mining.

Major challenges will be faced by any Government following the successful cessation of the war through the peace process, which is pursuing a vigorous effort by the mediators at Jeddahs negotiating platform.

The first urgent economic reforms call for a halt to the depreciation of the Sudanese pound, after its horrific decline in the currency market, and have not found an attempt to save it, with a gradual or abrupt downgrade.

The central bank tried to intervene in the foreign exchange market before the war using various mechanisms, including dollar auctions.

Against the dollar, the pound surpassed the 1,000 mark in the parallel market, "until the last week of November", compared to 763 pounds in official transactions across banks.

Economists have retracted the deterioration of the pound for war-related reasons in Khartoum and the Darfur states, along with the countrys security instability.

All this compounds the economys inherent ills from a structural imbalance in economic indicators, such as inflation, the volume of foreign exchange reserves and public budget deficits, as well as the injection of new cash through deficit financing as the numbers of refugees and displaced persons grow.

The tracker of the economic issue will not find an emergency ambulance plan to cope with the effects of the current war, foremost among which is the decline in the value of the pound.

The decline in exports and foreign trade as import demand increases is one of the most important factors in the loss of the pounds value.

Foreign and national capital invested in leaving the Sudan appeared to be the result of looting and destruction of a large part of the investment, especially in conflict-raging areas.