During a Sphere workshop at the Food and Development Forum… Economic expert Dr. Mahdi Al-Rikabi… Balancing supply and demand of free currencies and doubling productivity lead to the stability of the exchange rate.
It hosted the Food and Development Forum and the National Community Initiative to Achieve Food Security.
And Al-Anwar development media platforms for two days
Economist Dr Mahdi Othman Al-Rikabi will talk about the exchange rate between equilibrium and speculation
Al-Rikabi believes that there is an imbalance between supply and demand and any increase in supply reduces prices, so money market participants resort to speculation.
Dr. Al-Rikabi gave a detailed explanation of supply and demand and said that there are intersecting lines between supply and demand.
So there are factors including consumer spending. The more consumption increases, the greater the demand.
The general state budget is based on expenditure and production and it spends
In management, it also spends to meet the necessary needs, and there are capital expenditures, all of which affect the movement of demand. Likewise, foreign trade affects the movement of demand, especially imports.
He added that the money market of goods contains money and it is linked to demand, either with the aim of withdrawing money to buy goods for trade, and here there is an increase in the demand for money, and there is a demand for making life easier, and there is a demand for money for commercial purposes and there is a demand for reserve currency, said Dr. Mahdi Al-Rikabi.
Money market equilibrium is determined by the interest rate
There must be a balance between the two markets, the market for goods and services and the market for money.
The balance sheet must be without speculation
The general balance of the economy between aggregate demand and supply reiterated that the balance will not be achieved without production, export movements and trade of raw materials between countries in a manner that revives .
The free foreign exchange market is assumed to be in equilibrium. Every time demand increases while supply remains constant, the dollar rises and vice versa.
It must therefore be a natural balance without distortion, and what happened between 1300 and 1700 was unfortunately only speculation intended to defeat the national economy and
The deterioration of the exchange rate, Dr. Al-Rikabi said that it is necessary to know what is the exchange rate and what is the floating, and he replied that.
The exchange rate is the ratio between the price of a country's national currency and free currencies.
For countries with which the country has trade relations, this means
The quantity of national monetary units that circulate between the producer, consumer and investor to obtain foreign currencies and the free currencies accepted internationally in transactions, led by the dollar, then the pound sterling and the euro, the most widely traded being the dollar. .
He added that countries seek to conserve their foreign currencies to import goods, services, etc.
According to Dr. Mahdi, floating means letting the price of the currency depend on supply and demand.
According to him, the price of money and the float are generally determined according to two absolute types, leaving the price of money to the forces of supply and demand and the state which determines the price of money.
The State has its own means to achieve this, in particular by increasing the injection of free currencies into banking institutions.
Regarding the fluctuation of the exchange rate in Sudan, Dr. Al-Rikabi said that once, during several stages of the period before the liberalization policy, from 1984 to 1991, the exchange rate increased and was lower at two pounds.
From 1992 to 2004 AD
Increased to 12 pounds
Until 2011 AD, the price of the dollar was stable and the largest increases
This was after 2019 AD
He attributed the reasons to political instability.
Selling Makes Things Work Without Planning
Lack of stability with differences in intellectual references and definition of systems, philosophy and sectarianism
With other reasons
Southern secession actually affected currency movement and exports, wars and disasters. The Southern War exhausted most of the country's resources, and the rebellion that exists today is very, very influential and has an obvious impact, in addition to disasters such as these. like floods and others.
One of the reasons is the absence of clear plans, despite efforts to develop the production sector, especially production for export, and the absence of a clear policy to increase exports and rationalize the imports.
Economist Dr. Mahdi Othman Al-Rikabi presented and explained the proposed measures to stop the deterioration of the exchange rate.
We have two exchange rates, the equilibrium price, which is the real price, and the price resulting from speculation, which is the dominant price.
When the demand is for speculation and the demand for cash is for services, as opposed to speculation
The first requirements are legal and security measures, and the fact that the state was able to control and return the price that occurred a few days ago.
He added that there must be a balanced and remunerative price with the aim of attracting expatriate savings, motivating investors and not stopping speculation in the country.
Import issues, particularly of goods and services
And production and industry requirements as well
We must ensure that speculators do not control the money market and that banks lose their balancing role.
We need to review the banks' trading policy as a whole
What exists in some of them is obstructive and bureaucratic
Transfer procedures must be facilitated
We must reconsider the development and diversification of agricultural, industrial, mining, oil and other production. This is the test of balance and price stability, and even a rise in the price of the local currency should not be spontaneous. must have a comprehensive plan for production, growth and development, especially distinctive production that we are famous for.
Livestock should be exported based on value addition instead of live meat etc.
We also import what can be produced and manufactured
Such as milk, oils and many products, and it is important for states to develop industrially, this has become a duty in addition to restoring the economy of war, usury and conspiracy against the nation. its resources and economy, expert Al-Rikabi said that we
In light of the imposed war, we must increase production, doubling it several times, and we must activate our economic relations with countries that can deal with us, and we must attract the support of global financial institutions and relations to enable the production. Countries play their role, so we need to take great steps in this aspect in order to keep pace with this step and cross it, God Almighty willing.
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