Sudan pound crashes to 10,000 per dollar as war batters economy

Sudan’s currency hit a new low of 10,000 Sudanese pounds to the dollar in parallel market trading on Wednesday, Oct 21. The fall extends a sharp slide over recent months as wartime conditions hammer the economy.

The rapid 60% depreciation has heaped hardship on Sudanese still trying to regain their footing after devastating conflict and forced displacement caused by the war between the Sudanese armed forces and the paramilitary Rapid Support Forces. Basic food items are now out of reach for many.

Official rate stuck

Sudan’s official exchange rate remains at 4,200 Sudanese pounds to the dollar. That rate was last seen on the parallel market in army-controlled areas in May.

A large portion of the fall has happened over the past month. The pound dropped from a previous low of 8,000, a depreciation of 20%. Before the war started in April 2023, the rate was about 600 pounds to the dollar.

Import demand and gold smuggling

Currency traders cited import demands as a chief factor. The government increased the tightly controlled customs dollar, used to calculate duties, to more than 5,600 this week.

As the war continues, Sudan has decreased production of key dollar earners. Its chief export, gold, has increasingly been smuggled abroad. The army-controlled government has said the war and reconstruction efforts require dollar-draining imports.

Pressure on households

The currency collapse is making imports more expensive and adding to the cost of basic goods for households already hit by conflict and displacement. The official rate has not moved, leaving a wide gap with parallel market trading.