Banking Expert to Sudanhorizon: Withdrawn Low-Denomination Banknotes Have Minimal Impact on Currency in Circulation

Sudanhorizon – Hala Hamza

Banking expert Noaman Youssef Mohamed said that the low-denomination banknotes recently withdrawn by the Central Bank of Sudan—the SDG 1, 2, 5, 10, 20, and 50 notes—have become virtually absent from circulation, particularly in major cities, as a result of inflation and the sharp rise in the general price level, rendering them ineffective as a medium of exchange.

Speaking to Sudanhorizon, Youssef explained that these denominations are no longer used in most day-to-day transactions, which now rely primarily on higher-value notes. He noted that the smaller denominations have largely disappeared from markets or remain available only in very limited quantities, significantly reducing the immediate impact of their withdrawal on commercial activity in urban areas, since they no longer constitute a meaningful share of the currency actually in circulation.

Youssef, however, questioned the situation in rural areas and some states where portions of these denominations may still be in use. He said this likely explains why the Central Bank granted a three-month grace period for exchanging the notes while also guaranteeing the rights of holders in states experiencing exceptional security or banking conditions.

He described the measure as primarily an effort to restructure Sudan’s currency denomination system and remove banknotes that have lost their economic usefulness, rather than a policy aimed at addressing liquidity or withdrawing a significant volume of cash from the market. Based on field observations, he said, the total value of these denominations still in circulation is likely very limited compared with higher-value banknotes.

Last Saturday, the Central Bank of Sudan announced the withdrawal of the six low-denomination banknotes from circulation. The Bank instructed holders to exchange the withdrawn notes within three months from the date the announcement is published in the Official Gazette of the Republic of Sudan, in accordance with regulations set by the Bank.

Under the decision, the notes may be exchanged at face value only by depositing them into bank accounts at branches of commercial banks. The Central Bank said the exchange period will expire at the close of business on July 30, 2026.

The Bank also confirmed that the withdrawn denominations will remain legal tender throughout the three-month grace period and may continue to be used in transactions during that time. However, cash-for-cash exchanges will not be permitted. Once the deadline passes, the notes will lose their status as legal tender and will no longer be accepted for settling financial obligations or commercial transactions.

The Central Bank further reiterated its commitment to safeguarding the rights of holders of the withdrawn notes in states facing unsuitable security or banking conditions, allowing them to redeem the notes at face value in accordance with the Bank’s assessment of local circumstances.

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