Black market rates for the Sudanese pound hit a record low against the dollar on the black market on Tuesday as importers struggled to get hard currency, likely adding to pressure on the government to raise state salaries.
There is little foreign or official market trading in the Sudanese pound but its rate on the black or parallel market is an indicator of the mood of the business community and ordinary people tired after years of economic crises and ethnical conflict.
The rate is watched by foreign firms which sell products in pounds but struggle to convert profits into dollars. Cell operators Zain and MTN or Gulf banks such as Dubai Islamic Bank have investments in Sudan. Sudan has avoided an "Arab spring" like neighbours Egypt and Libya but the government faces dissent over spiraling inflation due to the loss of three-quarters of its oil production when South Sudan seceded in July 2011.
Oil was not only the main source for state revenues but also for dollars needed to fund imports as Sudan produces little. Annual inflation hit 46.5 percent in November, triple the 15 percent in June 2011, the last data before southern secession. On Tuesday, one dollar bought up to 7.1 pounds, passing for the first time the psychological mark of 7. Last week, the rate on the black or parallel market, which has become the benchmark, was around 6.9. At the time of secession it was 3.3.
By contrast, the official rate stands at around 4.4 but it has little value as the central bank and commercial lenders are unable to produce enough dollars through official channels for import firms, traders say. "It is almost impossible to get dollars in Khartoum and it gets worse," said a black market trader. "The mood is very bad."
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