Sudan’s Devaluation Debt Relief Path Eased by Dollar Trading

Sudan’s Devaluation Debt Relief Path Eased by Dollar Trading

In this July 24, 2011, file photo, Sudan's new currency sits behind a window at the central bank in Khartoum, Sudan. (AP)

Sudan's devaluation of its currency last month, a long-awaited step in tackling the country's chronic economic crisis, initially caused confusion among banks, traders and clients.

Yet less than two weeks after Sudan slashed the value of its pound and put a managed float in place, its banks are gradually taking over currency trades, opening the way for billions of dollars in debt relief and the unlocking of new finance.

The Sudanese government is already getting some help from donor funds previously blocked by sanctions and the delay in exchange rate reform.

The central bank weakened the official exchange rate to 375 Sudanese pounds, close to the black market rate, from the previous 55 pounds on Feb. 21. Sudanese authorities have since moved cautiously as they encourage citizens to use banks, while trying to cut off supplies of dollars to the black market.

Channeling transactions through banks will eventually help build up a foreign exchange cushion to finance imports to Sudan, which has been in a state of political transition following the April 2019 overthrow of former president Omar al-Bashir.

Soon after the central bank's