Sudan devalues currency to get debt relief

As Sudan emerges from decades of international isolation, it's trying to overcome a crippling economic crisis and access debt relief.

On Sunday (February 21) its central bank sharply devalued the currency, announcing a new regime to "unify" official and black-market exchange rates.

The change is a key reform demanded by foreign donors and the International Monetary Fund.

But it's been delayed for months as shortages of basic goods and rapid inflation complicated things.

The central bank will set a daily indicative rate.

Banks and exchange bureaus are required to trade within 5% above or below that rate.

The central bank's governor told reporters that authorities would not control the rate.

Though Finance Minister Jibril Ibrahim said unspecified foreign funds were on their way to Sudan.

And the central bank could intervene if needed.

"This decision is our decision" Ibrahim said.

"We decided that our economy is at a situation that cannot be fixed without taking this decision."

Officials said steps had been taken to streamline imports of strategic commodities and limit imports of non-essential goods ahead of the devaluation.

The success of the transition is seen as crucial to stability in a volatile region.

Video Transcript

- As Sudan emerges from decades of international isolation, it's trying to overcome a crippling economic crisis and access debt relief. On Sunday, its central bank sharply devalued the currency, announcing a new regime to unify official and black market exchange rates. The change is a key reform demanded by foreign donors and the International Monetary Fund, but it's been delayed for months as shortages of basic goods and rapid inflation complicated things.

The central bank will set a daily indicative rate. Banks and exchange bureaus are required to trade within 5% above or below that rate. The central bank's governor told reporters that authorities would not control the rate, though Finance Minister Jibril Ibrahim said unspecified foreign funds were on their way to Sudan and the central bank could intervene if needed.

JIBRIL IBRAHIM: [SPEAKING ARABIC]

INTERPRETER: This decision is our decision, Ibrahim said.

JIBRIL IBRAHIM: [SPEAKING ARABIC]

INTERPRETER: We decided that our economy is at a situation that cannot be fixed without taking this decision.

JIBRIL IBRAHIM: [SPEAKING ARABIC]

- Officials said steps had been taken to streamline imports of strategic commodities and limit imports of non-essential goods ahead of the devaluation. The success of the transition is seen as crucial to stability in a volatile region.