To The Governor Of The Bank Of Sudan ,,, There Is No Solution Other Than To Leave

The

misspellings that accompanied the printing of the new 200-pound denomination of the local currency on both the Arab and English sides are the only ones that expose the confusion and turmoil of the government under the impact of the daily heavy blows that have been taking on the masses since the successful December 19 revolution. It is completely powerless (and in all senses this word means) to control matters and provide solutions to the political, economic and social issues of the masses. The statement made by the Governor of the Central Bank of Sudan in his last meeting with Channel 24 to reinforce the turmoil and shows that paralysis and total disability, and reveals the seriousness of the economic crisis facing the country.
In the context of his response to the problems of Tahir Hassan al-Toum about the printing of the Bank of Sudan for money in the recent period, and what the media dealt with, and what was also stated by a senior official by the term (the government employer Lord Rabb) and whether this printing will address the liquidity crisis or is just paper and would The governor replied that the printing that was done in no vacuum was a print that corresponded to accounts in banks and is just a means of exchange, like a check or bank card, and that this has nothing to do with inflation and will not lead directly to it.
We do not want to underestimate the efficiency of the governor, his knowledge and capabilities, but what he has said has nothing to do with the simplest principles of economics and the most basic principles of managing monetary policy and dealing with imbalances and crises.
At the same level as inflation or high prices, it is also known that a large amount of money is racing on a very limited number of goods and services, ie the demand for goods and services is greater than the supply of those goods and services. The normal situation in which stability is achieved is that the quantity of money in any country must be equal to the quantity of goods and services in that country. If the amount of money exceeds the quantity of goods and services, inflation occurs. If, on the contrary, the quantity of money is less than the quantity of goods and services, the recession, the opposite of inflation, occurs.
To simplify the idea of ​​inflation according to this definition we assume that the amount of money in the country is 1 pound and that this country produces only one unit of one commodity and therefore the price of this unit of the commodity is 1 pounds. But if we assume that the government printed 1 additional pounds to the amount of money in the country 2 pounds and at the same time the country has produced only one unit of the said item, the price of one unit of this item will automatically increase to 2 pounds instead of 1 pounds because the amount of money available In the country 2 pounds corresponds to only one unit of the only commodity produced by the country. However, if the government approves this printing by producing another unit of this commodity, its price will not increase and will remain 1 pound because the amount of money in the country has become 2 pounds. In contrast, the quantity produced from this commodity is 2 units worth 1 pound per unit.
This is very simply the inflation we know which is usually taught to first year students at the economics faculty within the principles of economics. But inflation, which the governor speaks implicitly in the context of his statement referred to has no place or presence in the principles and margins and the folds of economics and the science of money and banks. Therefore, either the governor does not know and this is a special calamity and he is at the head of the biggest monetary authority in the country, or he knows, but he is misleading, ignorant, lying and ridiculing the minds of depositors and citizens in a desperate attempt to hide the magnitude of the disastrous economic crisis the country is experiencing. I believe that the governor was forced to mislead and falsify because the reality of the banks and the reality of the lack of liquidity is a disaster for the Bank of Sudan and the government a real danger they can not control. This is evident from the Central Bank’s data and published reports on its official website, the most important of which are as follows:
First: the currency reached the public even before the outbreak of the revolution of December 2018 and specifically until the end of September 2018 about 92.2 billion pounds, representing about 98.6% of the total currency circulation in the country, amounting to 93.5 billion pounds. While the currency of the commercial banks amounted to only 1.3 billion pounds, representing only 1.4% of the total currency in circulation in the country (Central Bank of Sudan, economic and financial offer, third quarter, September 2018, table (13), page 34). Therefore, the attempts of misleading and ignorant exercised by the Governor of the Bank of Sudan in the meeting referred to become open. And that printing money without being matched by the equivalent of goods and services is not a solution to the liquidity crisis, but is aggravated and escalated. Any amounts that come out of the banks will not be returned to them because the customers (we mean all the customers individuals, companies, traders, employers, foreigners and expatriates …
Second: The bank receivables of the Central Bank of Sudan reached about 112 billion pounds, representing about 34% of the total assets of commercial banks amounting to 329 billion pounds, which is a disaster alone. It simply means that 34% of the bank’s cash assets are reserved with the Central Bank of Sudan as cash reserves, liquid assets and finance. In contrast, it can not provide liquidity to commercial banks from its own cash reserves because the central bank is simply bankrupt and the government itself is bankrupt. Table 13 (A), p. 22).
Third: The banks’ entitlements to the central government, state governments and public institutions amount to LE 57.4 billion representing 17.4% of the total assets of commercial banks amounting to LE 329 billion. While the total deposits of the central and state governments and public institutions combined with commercial banks amounted to only 10.2 million pounds, representing only 4.6% of the total value of deposits with commercial banks. Public deposits of LE 153.4 billion represent about 68% of total deposits with commercial banks (Figures 14A, 24, and 13B, page 23). This means that the government simply (unlike governments of reputable countries that feed banks and support them with respectable deposits to strengthen their financial position and protect their banking sectors) deposits in banks almost negligible amounts of LE 10.2 million and at the same time is the largest Borrower from banks where they borrowed 57. 4 billion pounds from the banks until September 2018 accounted for about 37.4% of the total deposits of citizens and represent 561 times the total value of government deposits with banks. In other words, the government simply does not pay taxes to citizens only through taxes, fees and royalties, but also by looting their deposits in banks. This would have been acceptable if the government had used the money it borrowed from customers’ deposits in development, health and education, and in raising the standard of living of citizens. On the contrary, it exploits customers’ deposits in exchange for its clients and dilapidated institutions, and in financing the purchase of pampas, batons, whips, and the various oppressive apparatuses used today to suppress the demonstrations of the peaceful revolutionaries over the world. In other words, the government simply does not pay taxes to citizens only through taxes, fees and royalties, but also by looting their deposits in banks. This would have been acceptable if the government had used the money it borrowed from customers’ deposits in development, health and education, and in raising the standard of living of citizens. On the contrary, it exploits customers’ deposits in exchange for its clients and dilapidated institutions, and in financing the purchase of pampas, batons, whips, and the various oppressive apparatuses used today to suppress the demonstrations of the peaceful revolutionaries over the world. In other words, the government simply does not pay taxes to citizens only through taxes, fees and royalties, but also by looting their deposits in banks. This would have been acceptable if the government had used the money it borrowed from customers’ deposits in development, health and education, and in raising the standard of living of citizens. On the contrary, it exploits customers’ deposits in exchange for its clients and dilapidated institutions, and in financing the purchase of pampas, batons, whips, and the various oppressive apparatuses used today to suppress the demonstrations of the peaceful revolutionaries over the world.
Fourthly, the Central Bank and the government lack foreign currency which helps them to provide wheat, flour and petroleum products. Net foreign assets until the end of September 2018 amounted to a deficit of LE 109.5 billion (Table 22, page 39). At the same time, it can not depend on the support of friendly or allied countries in providing flour, gasoline and gasoline. These countries have their own problems, problems and issues, and the government will not be able to support these goods forever. The return of living, gasoline and gasoline is looming on the horizon.
Fifth: With this disastrous situation bankrupt the government and the central bank, which reflected negatively on commercial banks and became threatened by the same itself to bankruptcy or collapse. All the means taken by the government to attract cash outside the banking sector have failed, forcing them to pursue merchants in their shops and in their homes to force them to deposit their money in banks, especially in the production and trade areas of crops such as white, Cash in the safe of his shop or home is not a right guaranteed by the law and guaranteed by international conventions, but a crime pursued by officers and members of economic security and forced to put them in banks to evaporate as evaporate deposits of other traders and citizens. This has hurt the interests of traders and individuals and thus adversely affected the economy as a whole. Merchants trading in cash outside the banking sector have appeared in production areas and at the entrances of banks and ATMs. The phenomenon of fracture once again weighed, but this time hit the production areas where producers and traders of crops are forced to buy goods with high liquidity such as sugar, for example, at very high prices and selling them in cash at low prices to get cash to run their daily business. Which led to higher production costs, which led to the rise in prices of major commodities to unprecedented levels, which led to the increase in inflation to exceed the barrier today, 73%.
Even tried-and-true monetary policy manipulations have become ineffective in these circumstances and are not actually applicable:
First: In the circumstances of the liquidity shortage in the banking system, central banks (as a remedy for the liquidity crisis) raise the interest rate on deposits to encourage banks to increase the volume of their deposits and also to encourage savings owners who do not deal with banks and do not have accounts to open bank savings accounts and deposit their savings to benefit from Raise interest rate. As the rate hike on deposits is automatically followed by a high interest rate on financing and loans. And that this will automatically affect producers as their production costs increase by increasing the interest rate on their loans from banks. The government usually adopts other fiscal and monetary policies that accompany the central bank’s decision to raise interest rates by reducing or reducing the taxes on producers. Customs duties or other fees to compensate producers for the high interest rate. Unfortunately, this is not applicable in Sudan today because deposit interest rates are already high. However, liquidity is running out of banks and the crisis is no longer a crisis of public distrust in the banking sector because today’s banking sector is a performance used by the rescue mafia to loot people’s savings. At the same time, the government can not reduce taxes, levies, fees, etc. because it simply lives on it, which is the largest item in its budget revenues.
Secondly, it is also the policy of the open market policy between the central bank and the banks, as well as between the central bank and the public. It is a policy adopted by central banks to deal with the crises of transit liquidity by announcing the central bank’s willingness to buy bonds and bonds held by banks in cash to provide liquidity through liquidating those securities that they hold as semi-liquid assets in their treasury. Or to declare its willingness to buy similar securities owned by the public and retain them as private investments through banks, that is, go public to sell their securities represented in bonds and sukuk and other banks and receipt of cash value and therefore have liquidity. However, even this method has become impracticable in the reality of Sudan today because the Bank of Sudan Bank is bankrupt and has no liquidity to buy securities either banks or the public, but on the contrary, has been throughout the period since the adoption of open market policy through the issuance of certificates Shahama and sisters is still Which is issuing these securities to obtain liquidity to finance the state budget and the drainage on its flaccid apparatuses and repressive apparatus and failed programs. This continued until it became a burden that weighed heavily on the commercial banks, which are required by the Central Bank to hold 30% of its assets in the form of certificates (Shahama, Shehab, Shehab, etc.). When the maturity date for the banks is forced by the Central Bank to extend other maturity periods . This is evidenced by the fact that the reserves of banks held by the Central Bank, including those certificates and Islamic sukuks, amounted to about 112 billion pounds until September 2018. The liquidity available in the same period is 1.
The last thing we say in this article to the Governor is that this authority, with its entire institutions that have governed the country for three decades, has become the main obstacle to the development of Sudanese society in terms of political, economic, social and cultural issues, and there is no solution to the crises that this power faces. History, fall down fall down.