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EU, WB welcome exchange rate liberalization in Sudan

Huwa's familly receives each month five vouchers with a total value of US$31.8 in North Darfur Zam Zam camp on 20 March 2014 (WFP/Amor Almagro Photo)February 22, 2021 (KHARTOUM) - The European Union (EU) and the World Bank (WB) welcomed the foreign exchange rate liberalization in Sudan, saying it will allow debit relief and the country’s economic recovery.

Sudan Sunday abandoned its fixed exchange rate as it decided that the Sudanese pound price will be set by the forex market based on supply and demand.

"The reform will pave the way for debt relief, including enhancing Sudan’s ability to reach the Decision Point under the Heavily Indebted Poor Countries (HIPC) Initiative," said the European Union spokesman.

The statement further said that the measure creates needed conditions to achieve key structural reforms, agreed with the IMF and the World Bank, and "may begin receiving interim debt relief".

The World Bank President David Malpass praised the decision of the Sudanese government saying it will allow progress on World Bank arrears clearance.

"The World Bank Group is working on large support programs to benefit the Sudanese people. Together with the IMF, we are working on ways to facilitate debt relief for other debt distressed IDA countries," stressed Malpass.

These are key steps toward triggering the debt reduction initiative of the heavily indebted poor countries (HIPC).

Last January, IMF Director Kristalina Georgieva told reporters they are working intensively with Sudan to create needed conditions for broad debt relief.

Georgieva further added they were encouraged by the strong support from the U.S., EU and UK for providing debt relief to Sudan and the determination of the Sudanese authorities to achieve reforms.

The EU in its statement called on the government to launch the family support programme to mitigate the harsh impact of economic reforms as the government discarded subsidies for many commodities and fuel.

(ST)