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Sudan takes the plunge and devalues

Further to recent blog posts here and here speculating about a possible devaluation of the Sudanese pound, we can report that the central bank has now carried out the full devaluation it promised.

The new official exchange rate is USD 1 / SDG 18.7 (from SDG 7). This remains a long way short of black-market rates, which reports suggest may be as high as SDG 40. There is a chance that black-market rates will pull back a bit towards the new official rate, but a wide divergence is sure to persist for the time being and further devaluations may be necessary in the future.

However, the official rate is likely to be pegged at SDG 18.7 against the dollar for some time, as the authorities have ruled out allowing the currency to float.

Expats working in Sudan who are paid at least partly in their home or other foreign currencies will be able to obtain more SDG in exchange. However, inflation, which is already high at 25.2%, is sure to rise as the cost of imported goods increases.

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