IMF, Sudan Reach Reform Deal

Sudanese customers queue to access money services at the Faisal Islamic Bank (Sudan) in Khartoum, Sudan June 11, 2019. REUTERS/Mohamed Nureldin Abdallah
Sudanese customers queue to access money services at the Faisal Islamic Bank (Sudan) in Khartoum, Sudan June 11, 2019. REUTERS/Mohamed Nureldin Abdallah
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IMF, Sudan Reach Reform Deal

Sudanese customers queue to access money services at the Faisal Islamic Bank (Sudan) in Khartoum, Sudan June 11, 2019. REUTERS/Mohamed Nureldin Abdallah
Sudanese customers queue to access money services at the Faisal Islamic Bank (Sudan) in Khartoum, Sudan June 11, 2019. REUTERS/Mohamed Nureldin Abdallah

The International Monetary Fund (IMF) said Wednesday it reached an agreement with Sudan on a reform deal that would back the 12-month Staff-Monitored Program (SMP).

An IMF mission led by Daniel Kanda held virtual meetings with the authorities from June 8-21 to discuss their reform package.

At the end of the mission, Kanda issued a statement revealing that "the Sudanese authorities and IMF staff have reached a staff-level agreement on policies and reforms that can underpin an SMP, subject to approval by the IMF's management and Executive Board.”

"The SMP aims at narrowing large macroeconomic imbalances, reducing structural distortions that hamper economic activity and job creation, strengthening governance and social safety nets, and making progress towards eventual HIPC debt relief.

“In support of these objectives, the reform package envisages increasing domestic revenue and reforming energy subsidies to create room for increased spending on social programs,” the statement read.

The new financing, however, has been held up by the need to settle decades of arrears to the IMF and Sudan’s listing, while under Omar al-Bashir’s rule, by the United States as a state sponsor of terrorism.

The Sudanese government pins hope on a conference of potential donors in Berlin this week.

Meanwhile, the economy is on the verge of collapse with inflation exceeding 100 percent and a shortage of bread and drugs.

Prime Minister Abdalla Hamdok finds himself desperate for foreign support.

“You have an unfinanced transition which is being hammered by a pandemic and a potential plague” of locusts, said a Western diplomat. “It puts pressure on the international community to put more money upfront quickly to ameliorate the degradation.”

Inflation topped an annual 100 percent last month as the government printed money to fund bread and fuel subsidies. Sudan’s currency has fallen to 150 to the dollar on the black market compared to 55 at the official rate, due to hard currency shortages.

Analysts and diplomats say Khartoum needs to deliver more substantial steps to overhaul an economy where key companies earning foreign currency such as gold exporters are controlled by military figures.

The government needs an estimated USD1.9 billion to cover the cash payment program. A preparatory document for the conference calls for “a pathway for Sudan’s re-engagement with international institutions” leading to eventual debt relief.

“The government is bankrupt effectively,” said Magdi el-Gizouli, a Sudanese academic and a fellow of the Rift Valley Institute. “They don’t have the funds for the cash program.”

The Berlin conference describes participants as “partners” rather than donors, to recognize that Sudan has its own resources and needs political and economic support rather than financial handouts, said Aisha al-Barir, a Sudanese government coordinator for the conference.

“Sudan is working on economic reform to take advantage of its own resources,” she said, pointing to a gold sector reform announced last week. Sudan also plans to liquidate or privatize many dysfunctional state firms.



Oil Prices Ease as Traders Assess US Tariffs and OPEC+ Output Boost

A drone view shows a portion of the crude oil tank farm in Midland, Texas, US June 11, 2025. REUTERS/Eli Hartman/File Photo
A drone view shows a portion of the crude oil tank farm in Midland, Texas, US June 11, 2025. REUTERS/Eli Hartman/File Photo
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Oil Prices Ease as Traders Assess US Tariffs and OPEC+ Output Boost

A drone view shows a portion of the crude oil tank farm in Midland, Texas, US June 11, 2025. REUTERS/Eli Hartman/File Photo
A drone view shows a portion of the crude oil tank farm in Midland, Texas, US June 11, 2025. REUTERS/Eli Hartman/File Photo

Oil prices retreated on Tuesday, having climbed almost 2% in the previous session, as investors assessed the latest developments on US tariffs and a higher than expected increase to OPEC+ output for August.

Brent crude futures fell 12 cents, or about 0.2%, to $69.46 a barrel by 1043 GMT. US West Texas Intermediate crude lost 25 cents, or about 0.4%, to $67.68.

US President Donald Trump began telling trade partners on Monday that sharply higher US tariffs will start on August 1, though he later said that deadline was not 100% firm.

Trump's tariffs have raised uncertainty across the market and concerns that they could have a negative effect on the global economy and oil demand.

While prices seem to be pressured by OPEC+ unwinding its voluntary output cuts, tightness in middle distillates and Houthi attacks on cargo ships are supporting the market, said Rystad analyst Janiv Shah.

On Saturday the OPEC+ group comprising the Organization of the Petroleum Exporting Countries and its allies agreed to raise production by 548,000 barrels per day (bpd) in August, exceeding the 411,000 bpd increases in the previous three months.

Investors were bullish heading into the peak summer demand period in the United States, however, with data from the US Commodity Futures Trading Commission on Monday showing money managers raised their net-long futures and options positions in crude oil contracts in the week to July 1.

Once oil demand declines seasonally, the increase in OPEC+ exports will hit the market, raising downside risks to prices, HSBC analysts said in a note.

Analysts at Commerzbank expect the price of Brent to fall to $65 a barrel on the emerging oversupply in the autumn months.

The decision by OPEC+ removes nearly all of the 2.2 million bpd of voluntary cuts made by the group since 2023.

The producer group is set to approve an increase of about 550,000 bpd for September when it meets on August 3, according sources told Reuters, which would unwind all of the cuts.