NewsCentral AfricaCash runs out in Khartoum as Sudan tries to halt economic crisis

Mon,10Dec2018

Posted on Thursday, 15 November 2018 11:48

Cash runs out in Khartoum as Sudan tries to halt economic crisis

By Reuters
 
 

In this Friday, Sept. 16, 2011 photo, vendors arrange their vegetables for sale at the market in Damazin, the regional capital of the Blue Nile region, south east of Khartoum, Sudan. Photo: Abd Raouf/AP/SIPAMany cash machines in the Sudanese capital have run out of banknotes as the government scrambles to prevent economic collapse with a sharp devaluation and emergency austerity measures.

Rising demand for cash due to inflation, lack of trust in the banking system and the central bank's policy of restricting the money supply to protect the Sudanese pound have all contributed to a liquidity crunch that has worsened in the past 10 days pending new banknote deliveries.

The banknote shortage comes one month after authorities let the value of the pound slide from 29 pounds to the dollar to 47.5 pounds and announced measures to tighten spending.

"We are suffering a lot. We went to the ATMs and there is no cash. We were standing in queues for so long that people started fighting each other. We want cash so that we can get on with our lines," said on Khartoum resident, Ali Mohammed.

"We are suffering and tired of standing in the queues, and we can't even withdraw from the ATM card, due to poor network and high demand," added another resident Mayada Ahmed.

Lack of foreign currency since losing 3/4's of oil output

Sudan has suffered from a lack of foreign currency since losing three-quarters of its output of oil when the south of the country seceded in 2011. The lifting of two decades of U.S. sanctions in October 2017 did not bring a hoped for reprieve.

Rampant inflation, strict withdrawal limits and a currency crisis had already placed Sudan's economy in deep trouble before the latest liquidity crisis.

President Omar al-Bashir, who seized power in a coup in 1989 and whose ruling party has said it would nominate him to run for reelection in 2020, has taken a series of steps to address the economic crisis in recent weeks.

A new central bank governor changed the system for setting the exchange rate and a new prime minister announced a 15-month economic reform plan.



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