Sudan’s government introduces new banknotes

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Sudan’s army-aligned government has introduced new banknotes in areas under its control, with the move reportedly aiming to lessen the effectivity of its paramilitary rivals, Al-Monitor reports on January 22nd.

The move has led to long queues at banks, impeding trade and creating division. The new banknotes have replaced 500 and 1000 Sudanese pound banknotes (worth approximately $0.25 and $0.50 respectively) in seven states.

With the conflict in Sudan devastating the country’s economy and infrastructure, the new move has introduced problems for the population. The banks in Sudan’s de facto capital, Port Sudan, have failed to provide enough new banknotes.

“I’ve been going to the bank four or five times a week to get the new currency. But there is none,” a 37-year-old woman told AFP, who requested anonymity.

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The Sudanese government justified the move, saying it is crucial for the protection of the “the national economy and [to] combat criminal counterfeiters”.

The population also faces the challenge of the old banknotes being rejected, with many small shop owners, grocers, rickshaw drivers, and petrol stations refusing to accept them.

“We cannot buy small things from street vendors anymore or transport around the city because they refuse the old currency,” the anonymous woman said.

In April 2023, 500 Sudanese pounds equaled one US dollar; today, the exchange rate fluctuates between 2,000 and 2,500 Sudanese pounds to the US dollar.

Defending the switch, Finance Minister Gibril Ibrahim claimed it aims to “move money into the banking system, ensure the monetary mass enters formal channels, as well as prevent counterfeiting and looted funds.”

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However, analysts argue that the issue is more centred in securing an advantage in the conflict between army chief Abdel Fattah al-Burhan and his former deputy, Mohamed Hamdan Daglo, who leads the paramilitary Rapid Support Forces (RSF).

“The army is trying to weaken the RSF by having a more dominant currency,” Matthew Sterling Benson at the London School of Economics and Political Science told AFP.

Benson added that the army wanted “to control the flow of money” after the RSF looted banks and prevent them from attaining resources.

The RSF has prohibited the new notes in areas under its control. They also claimed that the army is coordinating a “conspiracy to divide the country.”

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The currency shift has reportedly brought even more suffering to the Sudanese population.

Supply chains have been massively disrupted, according to Activist Nazik Kabalo, who has facilitated aid in several areas. Kabalo told AFP, “And if you do not have cash, you cannot buy supplies, needed for aid or for anything else.”

With the government promoting digital banking apps such as Bankak, a lot of Sudanese people are unable to access them due to extensive telecommunications outages.

But because the RSF mostly deals in foreign currency and has a transnational support network covering Libya, Chad and the Sahel, it could remain largely unaffected.

This move may further isolate civilians in RSF-controlled areas, impeding their ability to trade with regions under army control.

AL-Monitor via AFP

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