Japanese Ambassador to Asharq Al-Awsat: Riyadh, Tokyo in Consultations to Strengthen Energy Supply Chains

Sudan's deepening division is now impacting its financial institutions, as new banknotes issued by the Central Bank of Sudan are circulating in areas controlled by the Rapid Support Forces (RSF). This development raises serious questions about the future unity of the national currency and the central bank's capacity to manage the country's cash supply.

The RSF-aligned government, operating from Nyala, has reportedly reappointed Hussein Yahia Jangol as governor of what it terms a parallel central bank. This administration has allowed the circulation of banknotes bearing Jangol's signature while simultaneously banning other denominations signed by his successor, Burai al-Siddiq. Mohamed Hasan al-Taishi, prime minister of this parallel government, has announced monetary and banking policies intended to establish an integrated financial system.

Bankers and economists express grave concern, not about the banknotes themselves, but about the authority controlling their issuance and circulation. They warn of the potential negative impact on economic policy effectiveness, national currency confidence, and overall financial system stability. Experts highlight that effective monetary policy hinges on the Central Bank of Sudan's control over money supply, liquidity management, foreign exchange market pressures, inflation, and exchange rate stability.

The circulation of cash outside the central bank's purview complicates the measurement of the money supply, particularly the currency circulating outside the formal banking system. This situation weakens the monetary authorities' ability to combat inflation, manage liquidity, stabilize the exchange rate, and maintain price stability. Data from the Central Bank of Sudan indicated a money supply growth of 27.3% in April, reflecting existing liquidity management challenges exacerbated by the country's exceptional conditions. The fragmentation of monetary control further undermines the accuracy of monetary indicators and the implementation of consistent economic policies nationwide.

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The danger lies not in the banknote itself, but in the authority controlling its issuance and circulation, and in the possible impact on the effectiveness of economic policy, confidence in the national currency and the stability of the financial system.