Despite the agreements in Sudan .. The temporary recovery of the pound does not affect prices

Al Jazeera Net - Khartoum

The fragile economy of Sudan is moving, in accordance with the vagaries of politics in a country where stability has only been known. Since early July, following a series of agreements between the military and the forces of freedom and change, there has been some recovery in the national currency.

The parties to the crisis announced on the fifth of last month to reach an agreement rejoicing with the street and revived the weakening pound against the dollar since the secession of southern Sudan in 2011 and go about 75% of oil production.

Then the pound exchange rate in the parallel market improved from a few hundred pounds to the dollar to touch 49 pounds, approaching the official price of the central bank (45 pounds).

A rise in the national currency, which forced the group of companies "D" largest in the food industry in the country to issue an official bulletin to reduce the prices of its products.

Currency War
Mutawakil Omar, an employee at the Al Rayyan Hypermarket in Khartoum, said the price of a liter of milk fell after July 5 from 65 pounds (about 1.4 dollars) to 50 pounds (about $ 1.1).

But, according to Omar, what the citizen said to Al Jazeera Net, prices quickly rose again after a few days, which was repeated at the signing of the political agreement.

It is worth mentioning that with the arrival of the parties to the negotiations to reach an agreement on the constitutional document, the pound returned again to rise against hard currency in the black market to reach the dollar exchange rate to 66 pounds instead of seventy.

After the agreement was signed on Sunday, the dollar exchange rate ranged from 64 to 65 pounds, but without a rise in the pound on the prices of goods and services, which have become a concern for the vast majority of Sudanese.

The poverty rate is 36.1 percent, according to government statistics in 2017, which raised doubts about opponents who consider the poverty rate to exceed one third of the country's population.

Big Traders
But economic expert Professor Ibrahim Onor considered - in his interview with Al Jazeera Net - the exchange rate of the pound improved short-term reactions because of the signing of the constitutional declaration.

"What is going on has nothing to do with the actual performance of the economy," said Onur, who heads the Economics and People's Pensions Committee at the national dialogue conference during the era of ousted President Omar al-Bashir.

"There is no increase in production and no oil," he said. "It also makes the pound recover, and it is definitely not due to real economic factors."

The economist attributes the parallel exchange rate fluctuation to the control of four or five major traders who, when they buy the dollar, drop the pound and when the sell starts the pound rises, explaining that what is going on are just buying and selling strategies from traders who monopolize the currency market.

Economic stability and low prices also lock economic gaps in the currency trade and gold smuggling, and the failure to supply the output of the Central Bank, as well as to stop abuses and corruption associated with the organs of the state.

Economic shock
The picture does not look better among those in the medical supplies importing sector who are suffering from exchange rate instability, leading to growing concerns about losses that would be avoided by imposing a larger margin to cover any possible rise in the dollar exchange rate.

According to one of the suppliers of medical supplies to Al-Jazeera Net, the rise in the value of the pound due to any political event can not be considered an improvement. It is a shock that ends every day.

He points out that before the signing of the constitutional document, the exchange rate of the dollar dropped four pounds, and after signing one day, the exchange rate increased again by three pounds.

According to a currency trader in the parallel market, the dollar exchange rate on Monday rose to 64 pounds for sale and 65 to buy, and the exchange rate is likely to approach the seventy pounds within days.

Sudanese are still struggling to get cash from their savings with banks and ATMs, with the recovery of cash trading in exchange for bank accounts.

The supplier of medical supplies confirms that despite the fall of influential companies in the era of the "old" was involved in the purchase of hard currency from the market at any price, the market still need to decrease the dollar exchange rate for at least a month to reflect positively on the reduction of commodity prices.

People's hopes
In contrast, the employee at the hypermarket Al Rayyan admits that the pound rose after the signing of the constitutional document but is not expected to drop commodity prices because of the approaching Eid al-Adha, which is a season where the movement of buying momentum.

In the central markets for vegetables and fruits prices have seen a noticeable decline, without sellers returning to the political events.

The price of a kilogram of tomatoes fell to ninety pounds instead of two hundred. According to the trader, the price is only for supply and demand, and has nothing to do with the signing of the constitutional document.

But the red and white meats kept their prices high at 240-280 pounds per kilo of goats, 320-340 kilos of lamb, and about 175 pounds per kilo of chicken.

"It's good that prices have not gone away and the market has not collapsed despite political instability. But we would be happy if prices dropped significantly," said Al-Sistani Al-Azeeb, the owner of Al-Jazeera Net, when he was buying beef.