Sudan.. Demands to change the currency escalate amid controversy over a new category

Sudan.. Demands to change the currency escalate amid controversy over a new category

This situation caused a clear economic imbalance, the most important of which emerged in the deterioration of the national currency exchange value, as one dollar is currently circulating at the limits of 570 Sudanese pounds; production rates declined due to the lack of funding caused by the flight of liquidity; In addition to the high inflation rates, which exceeded 400 percent on an annual basis.

Despite the government’s recognition of the significant negative effects resulting from the high volume of liquidity circulating outside the banking sector; its pledge to take steps to absorb that liquidity and introduce it into the tax umbrella; However, it surprised observers with the issuance of the 1,000-pound denomination, which was considered by many to exacerbate inflation and went against the demands calling for focusing efforts on changing the currency completely.

Economists believed that the printing of new categories as large and ignoring the demands to change the currency will complicate the process of absorbing the fleeing liquidity; And thus serve in the interest of groups sabotaging the economy.

The government says the process of changing the currency is very expensive and complex and needs about 600 million dollars. However, Ibrahim Al-Badawi, the former Minister of Finance, stresses the importance of changing the currency in order to be able to control the liquidity circulating outside the banking umbrella; He warned of the significant negative effects that result from the presence of huge out-of-control liquidity; However, he told Sky News Arabia that the central bank does not see much danger in that.

Muhammad Sheikhoun, a professor of economics at Sudanese universities, believes that the key to solving the current economic crisis lies in controlling the cash circulating outside the banking sector, which constitutes a real obstacle to the progress of the country’s economy.

Sheikhoun confirmed to Sky News Arabia that any efforts to make monetary policies succeed will not work if the Central Bank of Sudan does not control the liquidity used in the market. explain "Trillions of pounds are being recycled away from the banking umbrella and the tax system in speculation and activities that harm the country’s economy; This uncontrolled money also contributes to increasing inflation rates and causes a major imbalance in the equation of supply and demand".

In the same context; Financial expert Al-Hadi Habbani points out that changing the currency is one of the effective solutions to control the currency outside the banking sector and will strike the cash hoarding dens and eliminate currency smuggling and money laundering due to drying up the capabilities of black market traders and will contribute to covering the public budget deficit from local and foreign exchange resources.

Habani told Sky News Arabia that the cost of changing the currency represents nothing in the face of the serious damage caused by the accumulation of 95% of the monetary mass in the hidden parallel economies outside the banking sector on the national economy.

explain "Contrary to what the competent authorities justify not changing the currency from its high costs, changing the currency can provide revenue that covers the cost of changing it so that the wealth of money tax is collected from the owners of large surpluses in addition to 5 percent of each amount exchanged as a contribution from the money owner to the expenses print new currency".

Habani adds that changing the currency will achieve large cash flows to support the public budget deficit by increasing tax revenues by collecting all tax arrears from tax evasion funds, in addition to seizing funds of questionable sources and exploiting them for the benefit of the general budget until their sources are verified; So that their owners are granted interest on them that is no less than the interest on bank deposits in the event that the legality of their sources is proven.

Habbani cautions that the Central Bank should set strict controls for the withdrawal and circulation of large sums, including certain ceilings and conditions to verify the scope, reasons and purpose of the exchange.

Habani believes that changing the currency will enable the Central Bank of Sudan to provide an accurate and detailed information base on the facilities of the business sectors and the sources of government and private wealth if it is linked to a tight plan through simple, well-designed forms that are filled out when exchanging old currencies.

But Habani points out on the other side; To the conditions that must be met in advance before changing the currency, including confidentiality and providing guarantees for the safety of the banking system by synchronizing the timing of currency exchange with procedures for auditing the conditions of the banking system, restructuring it and closing the door to loopholes that lead to resorting to money laundering activities before the exchange; Providing alternative currency exchange opportunities without delay for workers and private sector institutions that are distinguished by the soundness of their work and the status of their tax files, and giving priority to funds within the banking system; Organizing the receipt of currency in the appropriate order and gradation, setting withdrawal limits, and developing the electronic payment system.

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The fugitive bloc is considered one of the main reasons that led to the deterioration of the Sudanese economy, as some traders keep huge amounts of money outside banks and use them in activities and speculation that are not subject to government oversight. Amid doubts about suspicious operations in the real estate and currency trading sectors.

Many believe that the high cost that was used to print the thousand-pound denomination could have been employed to completely change the currency; Accusing the monetary authorities of not being serious about changing the currency amid suspicions that most of the mass circulating outside the banking range is owned by Brotherhood elements.

This situation caused a clear economic imbalance, the most important of which emerged in the deterioration of the national currency exchange value, as one dollar is currently circulating at the limits of 570 Sudanese pounds; production rates declined due to the lack of funding caused by the flight of liquidity; In addition to the high inflation rates, which exceeded 400 percent on an annual basis.

Despite the government’s recognition of the significant negative effects resulting from the high volume of liquidity circulating outside the banking sector; its pledge to take steps to absorb that liquidity and introduce it into the tax umbrella; However, it surprised observers with the issuance of the 1,000-pound denomination, which was considered by many to exacerbate inflation and went against the demands calling for focusing efforts on changing the currency completely.

Economists believed that the printing of new categories as large and ignoring the demands to change the currency will complicate the process of absorbing the fleeing liquidity; And thus serve in the interest of groups sabotaging the economy.

The government says the process of changing the currency is very expensive and complex and needs about 600 million dollars. However, Ibrahim Al-Badawi, the former Minister of Finance, stresses the importance of changing the currency in order to be able to control the liquidity circulating outside the banking umbrella; He warned of the significant negative effects that result from the presence of huge out-of-control liquidity; However, he told Sky News Arabia that the central bank does not see much danger in that.

Muhammad Sheikhoun, a professor of economics at Sudanese universities, believes that the key to solving the current economic crisis lies in controlling the cash circulating outside the banking sector, which constitutes a real obstacle to the progress of the country’s economy.

Sheikhoun confirmed to Sky News Arabia that any efforts to make monetary policies succeed will not work if the Central Bank of Sudan does not control the liquidity used in the market. He explains, “Trillions of pounds are being recycled away from the banking umbrella and the tax system in speculation and activities that harm the state’s economy. This uncontrolled money also contributes to an increase in inflation rates and causes a major imbalance in the supply and demand equation.”

In the same context; Financial expert Al-Hadi Habbani points out that changing the currency is one of the effective solutions to control the currency outside the banking sector and will strike the cash hoarding dens and eliminate currency smuggling and money laundering due to drying up the capabilities of black market traders and will contribute to covering the public budget deficit from local and foreign exchange resources.

Habani told Sky News Arabia that the cost of changing the currency represents nothing in the face of the serious damage caused by the accumulation of 95% of the monetary mass in the hidden parallel economies outside the banking sector on the national economy.

He explains, “Contrary to what the competent authorities justify not changing the currency from its high costs, changing the currency can provide revenues that cover the cost of changing it so that the wealth tax is collected from the owners of large surpluses in addition to 5 percent of each amount exchanged as a contribution from the owner of the money expenses of printing the new currency.

Habani adds that changing the currency will achieve large cash flows to support the public budget deficit by increasing tax revenues by collecting all tax arrears from tax evasion funds, in addition to seizing funds of questionable sources and exploiting them for the benefit of the general budget until their sources are verified; So that their owners are granted interest on them that is no less than the interest on bank deposits in the event that the legality of their sources is proven.

Habbani cautions that the Central Bank should set strict controls for the withdrawal and circulation of large sums, including certain ceilings and conditions to verify the scope, reasons and purpose of the exchange.

Habani believes that changing the currency will enable the Central Bank of Sudan to provide an accurate and detailed information base on the facilities of the business sectors and the sources of government and private wealth if it is linked to a tight plan through simple, well-designed forms that are filled out when exchanging old currencies.

But Habani points out on the other side; To the conditions that must be met in advance before changing the currency, including confidentiality and providing guarantees for the safety of the banking system by synchronizing the timing of currency exchange with procedures for auditing the conditions of the banking system, restructuring it and closing the door to loopholes that lead to resorting to money laundering activities before the exchange; Providing alternative currency exchange opportunities without delay for workers and private sector institutions that are distinguished by the soundness of their work and the status of their tax files, and giving priority to funds within the banking system; Organizing the receipt of currency in the appropriate order and gradation, setting withdrawal limits, and developing the electronic payment system.


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