December 10, 2018 / 1:28 PM / 7 months ago

Sudan pound slides to widest over official rate since devaluation

KHARTOUM, Dec 10 (Reuters) - The Sudanese currency slid to 60 pounds to the dollar on the black market on Monday, traders said, increasing the gap with the official rate of 47.5 pounds to its widest since a sharp devaluation two months ago.

The growing gap indicates the pound’s official value may have to weaken further, adding to the woes of citizens already suffering shortages of bread and fuel.

The government has been expanding the money supply to finance its budget deficit, spurring inflation and weakening the currency’s value.

“The deterioration of the Sudanese pound’s real value has made everyone rush to convert their savings into dollars,” economics professor and analyst Abdullah al-Ramadi told Reuters. “Bloated government spending has increased inflation.”

Annual inflation edged up to 68.93 percent in November from 68.44 percent in October, the state statistics agency said on Sunday.

The pound was trading at 57 to the dollar on the black market as recently as Saturday. On Oct. 7 the government weakened the official rate to 47.5 pounds to the dollar from 29 pounds.

The severe shortages of fuel and bread, both subsidised by the government, have forced people in the capital to queue in front of bakeries and cars to line up in front of petrol stations.

“I have been waiting for bread for more than an hour, and I have had difficulty withdrawing my monthly salary from the bank since December,” said Yassin Abdullah, 43, an employee standing outside a bakery on one of Khartoum’s main streets. “With prices rising we are living in a real nightmare.”

Reporting by Khalid Abdelaziz; writing by Patrick Werr; editing by David Stamp

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