Cash runs out in Khartoum as Sudan tries to halt economic crisis
SEE ALSO :Cash crisis talks abort againPRICES UP Though the streets have been quiet after rare nationwide protests triggered by bread prices early this year, further price rises since last month’s devaluation have triggered fresh grumbling. Spot checks with traders and market vendors showed that over the past month the cost of a kilo of flour has risen 20 percent, beef 30 percent and potatoes 50 percent. Sudan’s inflation stood at more than 68 percent in September, one of the world’s highest rates. At the start of the month the government bolstered flour subsidies to try to contain the impact on bread. A week ago, the prime minister tweeted that he had met the central bank governor to address the cash machine problem, and was reassured over the supply of banknotes. But an official at a commercial bank in Khartoum said the central bank was not injecting enough fresh currency, triggering the liquidity crunch and long queues at ATM machines. Sudan imported one shipment of new banknotes last month, and three further shipments are due to arrive soon, a finance ministry source said, without giving further details. Even after last month’s devaluation the pound is still under pressure and the gap between the official and black market rates has widened. On the black market, a dollar costs 52 pounds in sought-after cash and 58 pounds by cheque. “We expect the price of the dollar to continue to rise,” one black market currency trader told Reuters. “With the scarcity of foreign currency the practice of dealing at the cheque price has become widespread.” The body of banks and exchanges that since last month has fixed the official rate daily strengthened the pound to 46.95 pounds days after the devaluation but soon returned it to 47.5. “The real exchange rate is the parallel market,” said University of Khartoum professor Mohammed al-Jak. “The exchange rate mechanism should be based on supply and demand for it to have a true and realistic price, in line with the economic liberalization.”
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