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Fears have increased that the continued loss of value of the Sudanese pound could open the door to a new wave of inflation, amid an economy exhausted by war, declining production, and expanding smuggling activities.

Currency market traders said the dollar exchange rate in parallel trading reached about 5,550 Sudanese pounds yesterday, Saturday, compared to 3,576 pounds at the Bank of Khartoum.

Traders fear that the continued rise of the dollar could push for new increases in commodity prices. Traders believe that the persistence of this gap directly impacts import costs and commodity prices, given that a large part of commercial activity relies on foreign currency traded outside banking channels, according to the German news agency dpa.

This comes days after the United Nations High Commissioner for Human Rights warned that the war economy in Sudan has become a major factor prolonging the conflict, noting that smuggling of natural resources, especially gold, provides continuous funding sources for the warring parties and undermines chances for economic stability.

Economic experts say the pressures on the exchange rate are no longer only linked to the scarcity of foreign currencies, but have become the result of overlapping factors including declining production, high transportation costs, the expansion of informal activity, in addition to the war's impact on trade and investment movement.

Despite the measures taken by the Central Bank of Sudan in recent weeks to strengthen stability in the foreign exchange market, markets are still awaiting whether the government will be able to take steps that limit the widening gap between the official and parallel rates, and ease the living pressures on citizens.

Traders fear that the continued rise of the dollar could push for new increases in the prices of imported goods in the coming days, while others believe that market stability will not be achieved without addressing the roots of the economic crisis and stopping the war that continues to drain the country's resources.

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