Sunday, August 5, 2012

Today's Major Market Move: Sudanese Dinar Weakens by 65% in July

The latest currency to experience an overnight devaluation in 2012 is the Sudanese Dinar. The other victims so far this year have included the Myanmarese Khat, Malawian Kwacha and the Syrian Pound. Sudanese officials decided to weaken the official which resulted in an overnight rise in the US Dollar / Sudanese Dinar cross of 65%. This change didn't show up in our data provider until August but the event actually took place in early July.

Click here to go to the live chart.
This event moves the Dinar up to third place in the dubious list of worst performing currencies in 2012. Here's the bottom 10:

Click here to go to the live table.
As is almost always the case, the official recognition of a currency's lower value lags well behind market recognition. Here are some more details from a Reuters article:
The pound's street value has dropped since South Sudan seceded a year ago, depriving Sudan of three quarters of its oil output as well as its main source of state revenue and foreign currency.
The Sudanese currency is still significantly overvalued - a dollar bought between 6 pounds and 6.10 pounds (Pikefin note: divide the rates listed in the above table by 100 for comparison) on the black market on July 19, close to a historic low of 6.20 reached in May - and further devaluation could be on the cards.

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