Specialists: Major Challenges Facing the New Monetary Policies

Sudanhorizon – Hala Hamza

Specialists in the monetary sector welcomed the new monetary policies for 2026, describing them as positive and capable of leading to monetary and economic recovery if fully and properly implemented.

They called for a focus on microfinance and the proportion allocated to it within banks’ financing portfolios as a necessity to overcome the effects of the war on citizens, and for providing guarantee mechanisms to ensure its implementation, noting that major challenges stand in the way of policy execution.

The former Director General of the Family Bank, Dr. Saleh Jibril, told Sudanhorizon that one of the most important points highlighted in the new monetary policy is digital transformation through a digital infrastructure that facilitates public interaction with banks.
He expressed hope that this would be achieved through close coordination with the Ministry of Communications and Digital Transformation.

He pointed out that the indicators emphasized by the policy regarding inflation, the exchange rate, gold reserves, foreign currency reserves, and maintaining the supply side—if implemented—would have a very positive impact on the economy and lead to recovery.
Jibril stressed the need to achieve value-added production to increase foreign currency revenues.

He also emphasized the importance of coordination between the Central Bank, the Ministry of Finance, and relevant ministries to control the composition of exports and imports and the balance of payments.

He noted that the monetary policy referred to the implementation of financial inclusion and microfinance, allocating 12% of banks’ financing portfolios to microfinance.
However, he questioned the actual availability of this percentage for microfinance and the mechanisms to guarantee its flow, especially since most banks are private-sector institutions that tend to operate cautiously to avoid further risks after the outbreak of war.

He stressed the importance of launching initiatives and adopting a different approach to facilitate the flow of resources to microfinance institutions so they can secure sustainable funding.

For her part, banking expert Dr. Marwa Qabbani told Sudanhorizon that the Central Bank’s message in its new monetary policies carried hope for the recovery of Sudan’s banking sector and outlined the contours of an ambitious plan for Sudanese banks at the beginning of the reconstruction phase of the banking sector, through issuing flexible policies and legislation and introducing important reforms across various economic sectors, alongside monetary policies aligned with those of the Ministry of Finance and the Ministry of Digital Transformation.

Qabbani said this indicates the start of implementing a clearly defined strategic plan focusing on curbing inflation, stabilizing prices, managing local currency and liquidity, strengthening demand for foreign currency, and emphasizing financial inclusion and microfinance with a significant allocation.

She called for doubling the percentage allocated to microfinance to contribute to reconstruction and small projects.

She explained that the financial stability plan depends entirely on providing reserves of foreign currencies and gold, and on the possibility of using gold as collateral in investment operations through banks.
She called for amending policies and laws regulating the use of gold as collateral in investment operations, and for focusing on electronic tools and channels, which require coordination of efforts with the Ministries of Digital Transformation and Finance through the implementation of the e-government program and the promotion of a digital transformation culture—now an imperative necessity—to link banking systems with other entities and complete governance and transparency processes.

Qabbani noted that the Central Bank Governor, in announcing the policy during her meeting with bank general managers, focused on the necessity of having compliance and anti-money laundering systems as an urgent requirement to review banks’ systems, with the need to replace them with modern systems that keep pace with the technological revolution, align with security and oversight frameworks, and benefit from the Central Bank’s support for such national projects and the provision of necessary infrastructure to ensure continuity of banking operations.

She described the repeated meetings with banks and their management as confirming a consultative approach and an understanding of the importance of banking leadership and executive management through selecting cadres and expertise that contribute to bank reform and support the recovery of the banking sector, while emphasizing the need for an active role for the Sudanese Banks Union and the revitalization of specialized banking committees.

Meanwhile, banking expert Walid Dalil told Sudanhorizon that monetary policy in Sudan faces major challenges due to the limited range of available instruments.
He pointed to constraints on the Central Bank’s ability to influence the money supply because of the underdeveloped financial system and the dominance of the informal sector.

He said this limits the effectiveness of traditional policy measures such as open market operations and reserve requirements, in addition to the lack of a well-functioning interbank market, which hampers the transmission of monetary policy measures to the broader economy.

Dalil noted that Sudan has long suffered from high inflation rates, posing a major challenge to monetary policy.
He said inflation erodes the purchasing power of the Sudanese pound and undermines the effectiveness of monetary policy measures aimed at stabilizing the currency.

He explained that the Central Bank’s ability to control inflation is further complicated by supply-side factors such as food price shocks and structural constraints that lie beyond the scope of monetary policy alone.

Dalil said Sudan’s exchange rate regime has undergone frequent changes and fluctuations, creating uncertainty and challenges for monetary policy.
He pointed to the Central Bank’s previous use of a fixed exchange rate system, followed by managed floating, and more recently a flexible managed float with currency linkage.

He described these repeated shifts in exchange rate policy as limiting the Central Bank’s ability to maintain stability and predictability in the foreign exchange market, thereby affecting inflation and economic growth.

Dalil said one of the main constraints on monetary policy in Sudan is fiscal dominance and excessive government borrowing from the Central Bank to finance budget deficits, which creates upward pressure on inflation and limits the Central Bank’s ability to pursue an independent monetary policy.
He noted that this phenomenon—known as fiscal dominance—undermines the effectiveness of monetary policy measures and hampers the Central Bank’s ability to anchor inflation expectations.

He added that Sudan has experienced prolonged political and economic instability, posing an additional challenge to monetary policy by disrupting the financial system and hindering the Central Bank’s ability to implement effective policy measures.
Moreover, weak institutions and governance issues have led to a lack of credibility and trust in Central Bank policies, further complicating the effectiveness of monetary policy actions.

Dalil concluded that the future outlook for monetary policy in Sudan remains challenging given the country’s current economic conditions. However, by implementing a comprehensive set of measures—including strengthening the monetary policy framework, enforcing stricter monetary measures, promoting economic diversification, enhancing financial inclusion, and boosting regional integration—Sudan can pave the way toward a more stable and prosperous future. He stressed that it is crucial for policymakers to carefully consider these recommendations and take decisive action to address the economic challenges facing Sudan.

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