Inflation bites hard in Sudan

– Sudan’s central bank will start printing 100-pound banknotes for the first time to ease a liquidity crisis exacerbated by rampant inflation, state news agency Suna said yesterday.

Sudan’s economy has been struggling since the south of the sprawling northeast African country seceded in 2011, taking with it three-quarters of oil output and depriving Khartoum of a crucial source of foreign currency.

In recent months, local currency liquidity at banks has dried up, with long queues outside of banks and daily withdrawal limits falling to as low as 500 pounds (R240) in some places.

The previous largest banknote in Sudan was 50 pounds.

“Printing the 100-pound banknote is a step in the right direction, because the high inflation rate has dropped the value of the 50-pound banknote,” said Abdullah al-Ramadi, an economist.

The decision “will help solve the liquidity shortage that harmed the economy and the central bank has to increase the money supply to overcome the liquidity crisis,” Al-Ramadi added.

Restrictions on how much cash is available to commercial banks are among measures aimed at curbing rampant inflation and addressing an economic crisis that could derail President Omar alBashir’s plan to extend his nearly 30 years in power. – Reuters

Khartoum