CAIRO: The International Monetary Fund (IMF) has urged Sudan to float its currency to boost growth and investment, a measure the government has opposed even after the United States lifted 20 years of sanctions in October.
The government would need to accompany a market-determined exchange rate with other tough reforms such as expanding the country’s tax base if Khartoum hopes to benefit from sanctions relief, the IMF said in a report published on Monday.
The Sudanese pound has weakened against the dollar since Washington lifted sanctions encouraging traders to step up imports, putting pressure on scarce hard currency.
It hit an all-time low of 27 pounds against the dollar on the black market in November but strengthened to 23 pounds per dollar after a raft of emergency measures that included capping currency transfers and cracking down on currency traders.
The IMF said the end of sanctions was an opportunity for Sudan to strengthen its economic outlook but it required a currency float.
“Fiscal policy should be tightened to eliminate the monetization of deficits, thus helping to reduce inflation and buttress macroeconomic stability,” it said. It projected GDP growth of 3.25 percent for 2017, down from 3.5 percent in 2016.
The weakened pound has contributed to surging inflation, which reached 33.08 percent year-on-year in October, according to the Central Statistics Office.
The central bank has held the official exchange rate at 6.7 pounds to the dollar but currency is largely unavailable at that price.
“The tax base should be broadened, energy and wheat subsidies phased out and replaced by increased cash transfers to the poor, and capital investment increased,” the IMF said.
The import-dependent country has suffered both from the sanctions and from the secession of South Sudan in 2011, when it lost three-quarters of its oil output, its main source of foreign currency.
One of its largest other sectors is agriculture.
Sudan sorely needs a financial lifeline from donors but it is unable to borrow from the IMF after failing to pay back previous loans and efforts to reschedule debts it owes other countries have faltered.
Sudan’s external debt, which the IMF described as unsustainable, is expected to reach $54.1 billion in 2017 and $56.5 billion in 2018, the report said.
IMF says Sudan must float currency to boost growth, investment
IMF says Sudan must float currency to boost growth, investment
Closing Bell: Saudi main index closes in red at 10,847
RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Wednesday, losing 58.51 points, or 0.54 percent, to close at 10,847.93.
The total trading turnover of the benchmark index was SR3.78 billion ($1 billion), as 73 of the listed stocks advanced, while 187 retreated.
The MSCI Tadawul Index decreased, down 7.09 points or 0.48 percent, to close at 1,472.98.
The Kingdom’s parallel market Nomu lost 178.75 points, or 0.77 percent, to close at 22,916.83. This comes as 30 of the listed stocks advanced, while 37 retreated.
The best-performing stock was the Power and Water Utility Co. for Jubail and Yanbu, with its share price surging by 8.47 percent to SR31.24.
Other top performers included Saudi Paper Manufacturing Co., which saw its share price rise by 6.13 percent to SR53.70, and Jamjoom Pharmaceuticals Factory Co., which saw a 4.58 percent increase to SR137.
On the downside, the worst performer of the day was CHUBB Arabia Cooperative Insurance Co., whose share price fell by 5.14 percent to SR17.53.
Saudi Kayan Petrochemical Co. and Arabian Internet and Communications Services Co. also saw declines, with their shares dropping by 4.87 percent and 4.43 percent to SR4.88 and SR181.40, respectively.
On the announcement front, Saudi Kayan Petrochemical Co. announced its annual financial results for 2025, with sales dropping 3.06 percent year-on-year to SR8.45 billion. The company also recorded a net loss of SR893.86 million.
In a Tadawul statement, the company said the net loss and decline in annual sales were driven by a drop in average selling prices, despite higher sales volumes.
