Sudan has taken measures to curb inflationary effects of pound floating: minister

(KHARTOUM) - The transitional government in Khartoum took measures to address the inflationary effects of the Sudanese pound floating, said Finance Minister Gibril Ibrahim.

Gibril Ibrahim speaks to the media in Khartoum on 17 November 2020 (ST photo)The Central Bank of Sudan on Sunday liberalized the Sudanese pound saying its prince will be determined by the exchange rate in the forex market.

"The decision has an inflationary effect, but the government took all needed measures that would stabilize and improve the exchange rate of the national currency, as well as eliminating the deficit in the national budget that leads to deficit financing, which is one of the biggest causes of high inflation rates," Ibrahim told reporters in Khartoum, after the floating.

He pointed out that the unification of the exchange rate would address the structural imbalances including the budget deficit, the balance of payments deficit and addressing the high rates of inflation.

"The decision to unify the exchange rate will help improve the exchange rate, attract remittances from expatriates, limit smuggling of goods, contribute to Sudan’s debt relief, attract foreign investment flows, stimulate export and obtain its income through official channels," he further said.

The minister of finance spoke about the family support programme saying that the government suspended the programme due to a lack of sufficient information on the families, as requested by donors.

"The government is working to complete the information," he added in a press conference with the Central Bank of Sudan Governor and the Trade Minister.

Ibrahim said that the direct support money allocated for one person is 5 dollars, so a family of 6 individuals will receive 30 dollars (one dollar = 375 pounds).

The minister revealed that there are funds on their way to the country from abroad, without providing further details.

Also, he said that Britain said willingness to pay Sudan’s debts to the African Development Bank, which amounted to $ 100 million.

For his part, the Governor of the Central Bank of Sudan, Alfateh Zain al-Abidine, announced that his government decided three months ago to follow a dual banking system where Islamic and conventional banking operate side by side.

Since 1984, the Sudanese banking system has been dealing according to the Islamic system which forbids some transactions of the conventional financial system, such as lending money at rates of interest which are considered as usury.

Zain al-Abidine said that the central bank on Monday will transfer to the Ministry of Finance in local currency the funds allocated by donors to the direct family support programme.

In August 2019, the Transition Government began the experimental implementation of the support program before to stop it without explanation. Accordingly, a family will receive money directly instead of subsidizing fuel, electricity and bread.

Source: Sudan Tribune

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