Markets in areas controlled by the Rapid Support Forces (RSF) have witnessed an influx of new Sudanese banknotes, a development that has raised widespread questions about the source of these funds and the future of Sudan's monetary system unity. These developments come amidst the ongoing armed conflict since April 2023, where the paramilitary forces control vast areas, including the Darfur region and parts of the capital, and have effectively begun to exercise administrative functions through what is called the 'Tasis' alliance.
The currency issue has become a new focal point of conflict between the army and the RSF, especially after the Central Bank in Port Sudan decided to cancel the use of some old denominations and issue new banknotes of 500 and 1000 pounds. In response, the RSF prevented the circulation of the new government issues in its areas, leading to a severe liquidity crisis before the mysterious banknotes recently appeared to cover the salaries of employees and fighters.
Informed sources reported that the newly circulated banknotes appear to be in excellent, unused condition, despite bearing an issue date of May 2022. The paradox lies in these notes carrying the signature of Hussein Yahya Jangoul, who was the Governor of the Central Bank before the outbreak of the war, before he was recently appointed head of a parallel central bank affiliated with the 'Tasis' government in Nyala.
For his part, Mohamed Hassan Al-Ta'aishi, head of the 'Tasis' government, affirmed that their authorities still recognize currencies issued before June 2024, but he refrained from clarifying how the new quantities of cash were obtained. Al-Ta'aishi accused the pro-army government of attempting to use the banking system and the national currency as a weapon to economically strangle civilians in areas not under its control.
In contrast, no official comment has been issued by the Sudanese Central Bank, affiliated with the government in Port Sudan, regarding the appearance of these funds or their legal legitimacy. Economic experts believe that this step represents a dangerous escalation that could lead to the emergence of two separate financial systems, making any future political settlement more difficult and further complicating the already collapsing economic landscape.
International observers warn that establishing a parallel central bank lacking international recognition will make it difficult for Sudan to deal with global financial institutions in the future. Furthermore, the circulation of currencies of questionable origin could open the door to widespread counterfeiting operations, accelerating the pace of rampant inflation that is crushing Sudanese citizens in various states.
As a result of the lack of paper cash liquidity, Sudanese people have become almost entirely dependent on electronic banking applications, primarily the 'Bankak' application belonging to Bank of Khartoum. In RSF-controlled areas, intermediary offices have emerged offering money transfer services for high commissions, exploiting the urgent need of residents to secure basic necessities amidst harsh war conditions.
In terms of market value, the Sudanese Pound continues its historical collapse against foreign currencies, with the dollar exchange rate recording record levels exceeding 5000 pounds in the parallel market. This decline represents a sharp drop compared to the pre-war exchange rate, which did not exceed 600 pounds, reflecting the scale of the economic catastrophe the country is experiencing with the continuation of fighting.
Liquidity management is subject to technical arrangements aimed at maintaining economic stability while using currency as a pressure tool.
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Monetary Split in Sudan: New Currencies Circulate in RSF-Controlled Areas