Sudan’s pound touches 6,400 to the dollar days after the central bank frees rates

Sudan Tribune reported on Thursday 27 August that the pound hit an all-time low on the parallel market, touching 6,400 to the US dollar, after the Central Bank of Sudan gave commercial lenders more freedom to set their own rates. The 6,400 figure is attributed to traders and market participants. The narrower close — the dollar trading between 6,350 and 6,400, and the UAE dirham up to 1,710 pounds from around 1,695 earlier in the week — is credited by Sudan Tribune to Reuters' canvass of dealers, not to its own reporting. The trigger is a primary document: a circular issued earlier in the week repealing previous rate restrictions, permitting commercial banks to adjust declared rates and to purchase export revenues according to market supply and demand. The bank’s own stated rationale was to advance the managed float and bridge the divide between formal banking channels and the parallel market.

The implementation is where the policy shows. The Bank of Khartoum posted the dirham at 972 pounds on Thursday, having listed it at 1,630 the previous day — two prices a day apart, which Sudan Tribune reads as evidence of how erratically lenders are applying the new guidance. The trajectory is steep by any sampling method: 3,750 to the dollar on 1 January, 4,400 on 10 June, 6,350–6,400 on 27 August, a fall of roughly 70 percent in under eight months, with the dirham moving from 1,171 in June to 1,710 in late August. One foreign exchange dealer, speaking anonymously to Sudan Tribune, said some traders had halted sales of foreign banknotes expecting further falls; unnamed analysts in the same piece argued the currency could steady if banks absorb export revenues and supply commercial buyers. Both claims rest on unnamed voices.

Assessment: Read the circular as an admission rather than a reform: the official rate had stopped attracting sellers, so the state stopped defending it. What to distrust is the precision — these are trader canvasses, not an official series, and a single anonymous dealer cannot establish that the market has stopped clearing. The instructive number is not the dollar but the dirham, the working currency of Sudanese trade payments and remittances, which is what makes Gulf liquidity a monetary variable and not a political one. A treasury financed by gold and diaspora transfers is not disciplined by rate policy, which is why this belongs beside the Security Council fight over supply lines.