The Central Bank of Sudan (CBS) officially announced on Sunday (July 5th) the withdrawal of 6 denominations of money from circulation in the local markets, setting a legal plan to reorganize the denominational composition of the national currency in line with the severe economic changes witnessed by the country.

According to the statement issued by the bank, the decision includes banknotes of the denominations: one pound, two pounds, 5 pounds, 10 pounds, 20 pounds, and 50 pounds.

The bank urged the public to adhere to the three-month deadline for replacing these denominations, noting that their legal validity for trading will expire completely by July 30, 2026.

Replacement Mechanism and Security Guarantees

The Central Bank of Sudan has set strict mechanisms for the process of withdrawing currencies, as it explained that the replacement of cancelled denominations will be done exclusively by depositing them in bank accounts opened with commercial bank branches and at their face value, without allowing any direct cash exchanges (cash) at all.

The bank confirmed that the decision, which was published in the Official Gazette, reminds the public of it to ensure that these categories are discharged from liability as soon as the deadline expires. In a move to reassure citizens, the Central Bank pledged to guarantee the rights of holders of these categories in states that suffer from deteriorating security conditions or disruptions in the banking system, stressing that their value will be recovered in accordance with exceptional measures that will be announced later.

The path of the Sudanese pound's collapse

The decision to withdraw small denominations was linked to the historic and sharp decline in the purchasing power of the Sudanese pound; before the outbreak of the bloody war between the Sudanese army and the Rapid Support Forces, the exchange rate of the US dollar was stable at the threshold of 600 Sudanese pounds.

As the armed conflict turned into a war of attrition for institutions, the financial system collapsed and the dollar exchange rate exceeded the 5,000 pound barrier in the parallel market.

Sudanese economic sources indicated that this excessive inflation has made small monetary denominations (less than 100 pounds) have no real value in daily transactions, and have turned into an administrative and storage burden on banks, prompting the state to officially abolish them and focus on large denominations.

Institutional Fragmentation and Anonymous Currency Flow

According to Sudanese economic sources, the economic challenges have deepened following the monitoring of the circulation of large quantities of newly printed Sudanese pounds in markets and areas under the control of the Rapid Support Forces.

This cash has raised complex questions about its sources of printing and the international or local entities that engineer its flow, highlighting the scenario of the country's macro-fiscal split.

The sources indicated that the emergence of these funds coincided with the efforts of the Rapid Support Forces (RSF), which controls large parts of Darfur, parts of Kordofan and the capital – to establish de facto authority through the so-called "Sudan Constituent Alliance", which is the entity that tries to manage public services and pay salaries of employees independently of the central government in Port Sudan.

The repercussions of the humanitarian and economic catastrophe

The ongoing war has left one of the world's worst humanitarian and economic crises, with international estimates that tens of thousands of civilians have been killed, and some 13 million people have been displaced and sheltered internally and externally.

The destruction of industrial and banking infrastructure in Khartoum and the island's cities has led to an almost complete paralysis of state revenues, a decline in exports, and a halt in agricultural production, making the central bank's move a last-ditch attempt to control the cash mass in circulation and curb counterfeiting and parallel currencies that fuel the war economy.