The Sudanese Pound: Walking the Tide Robe Between the War and the Anvil of Inflation: How Can the Value of the National Currency Be Restored?
Nu’man Yousif Mohammed
The collapse of the Sudanese pound is no longer merely a set of figures shifting across exchange-rate screens or fleeting economic headlines. It has become a harsh daily reality experienced by citizens in the essentials of life: bread, medicine, transport, and basic needs that are increasingly beyond reach with each new decline in the value of the national currency.
When the price of a small triangle of cheese reaches 1,000 pounds (1,000,000 in old currency), and the dollar climbs to 4,100 pounds (4,100,000 in old currency), the issue is no longer simply one of rising prices. It is a serious indicator of the erosion of the Sudanese pound’s purchasing power and a sign that the economy has entered a critical phase of runaway inflation, threatening both living standards and social stability.
The National Currency as a Mirror of the Economy
A currency is not merely a piece of paper bearing numbers; it is a direct reflection of the strength, productivity, and political and monetary stability of an economy. As confidence in the economy weakens, confidence in the currency declines. People then turn to hoarding foreign currencies, gold, or goods, placing further pressure on the pound and trapping the economy in a vicious cycle of continuous depreciation.
In the Sudanese case, the ongoing war has not only destroyed infrastructure and sources of production but also disrupted the normal functioning of the economy, weakened the state’s ability to regulate markets, reduced public revenues, and increased unproductive expenditure. It is therefore unsurprising that this has translated into accelerating inflation and a sharp depreciation of the pound.
War: The Primary Driver of Collapse
The current deterioration in the pound’s value cannot be understood without considering the impact of war. War creates a distorted economy characterised by scarcity, speculation, and instability. When agriculture, industry, trade, and transport are disrupted, the supply of goods and services declines, while demand persists—indeed, often increases—leading to sharp price rises.
At the same time, governments in wartime are often compelled to finance expenditure through exceptional means, most notably deficit financing and the printing of money without productive backing. This is a certain recipe for currency erosion and rising inflation.
Every new pound injected into the market without a corresponding increase in production effectively means more money chasing fewer goods, inevitably resulting in higher prices and diminished purchasing power.
The Parallel Market and Deepening Crisis
As the gap widens between the official exchange rate and the parallel market rate for foreign currencies, the pound’s crisis intensifies. The parallel market not only reflects the weakness of monetary policy but also fuels speculation, creating a new psychological benchmark for the currency. Traders begin pricing goods based on expectations of future depreciation rather than current costs.
Thus, the citizen becomes a double victim: first of the declining value of the pound, and second of inflated pricing driven by speculation, fear, and uncertainty.
Inflation: The Greatest Enemy of the Poor
Inflation does not distribute its harm evenly; it strikes the most vulnerable hardest. Those on limited incomes are the first to pay the price, as their earnings remain fixed or adjust slowly while prices rise rapidly.
As inflation persists, savings are eroded, real wages decline, consumption falls, and poverty expands. At this point, the crisis is no longer purely economic—it becomes a social crisis that threatens overall stability.
How Do We Curb Inflation?
Despite the severity of the situation, halting the currency’s collapse is not impossible. However, it requires a comprehensive package of monetary, fiscal, and productive measures—not partial or temporary solutions:
First: End deficit financing.
The most serious threat to currency value is the printing of money to finance government spending. Unbacked monetary expansion must be halted, as continued liquidity injections without real output will sustain inflation.
Second: Restore confidence in the banking system.
The national currency cannot be protected without a trusted banking sector. Citizens must be encouraged to transact through banks, transfers should be facilitated, and attractive savings instruments in local currency should be offered, so that foreign currencies do not become the only safe haven.
Third: Narrow the gap with the parallel market.
Administrative crackdowns alone will not eliminate the parallel market. Its root causes must be addressed by increasing the supply of foreign currency, encouraging exports, controlling non-essential imports, and gradually unifying the exchange rate.
Fourth: Support domestic production.
No monetary policy can succeed without increased real output. Agriculture and industry are the first line of defence for the national currency. Greater production means more goods, lower prices, and reduced demand for foreign currency.
Fifth: Rationalise public expenditure.
Currency stability begins with fiscal discipline. Reducing unnecessary government spending, combating corruption and waste, and directing resources towards productive sectors all help curb inflation and strengthen the pound.
Sixth: Build foreign exchange reserves.
Holding foreign currency reserves gives the central bank greater capacity to intervene in support of the currency and enhances confidence in the economy. This requires effective management of exports, remittances, and sovereign resources.
The Real Battle Is Not Merely Monetary
In truth, the battle for the Sudanese pound is not purely a monetary one. It is a battle for political stability, economic production, and institutional trust. No national currency can remain stable amid a war that drains resources, undermines production, and erodes confidence.
Protecting the pound begins with addressing the root causes of economic decline. Currencies do not collapse in a vacuum; they collapse when production falters, policies become unstable, and trust disappears.
Conclusion
What the Sudanese pound faces today is not merely an exchange-rate crisis, but an economic system that has lost its balance under the pressures of war, inflation, and speculation. Without serious and urgent reforms, the deterioration will continue—and the citizen will bear the heaviest burden.
Restoring the value of the national currency requires political will, monetary discipline, support for production, and the rebuilding of trust in state institutions. The pound cannot be protected by decisions alone; a strong economy and a stable state sustain it.
Ultimately, the value of a national currency is, at its core, the value of the economy itself. If the economy is reformed, the pound will recover; if the dysfunction persists, the currency will continue to decline—no matter how many temporary remedies are applied.
Former banker – Institutional development consultant
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