The Sudanese war, which started in April 2023, has resulted in a sharp rise in the cost of living. / Photo: TRT World

Sudan's army-aligned government has issued new banknotes in areas it controls, reportedly aimed at undermining its paramilitary rivals.

The swap replaced 500 and 1,000 Sudanese pound banknotes (worth around $0.25 and $0.50 respectively) with new ones in seven states.

The government justified the move as necessary to "protect the national economy and combat criminal counterfeiters."

'Move money into banking system'

In Port Sudan, now the de facto capital, frustration boiled over as banks failed to provide enough new notes.

The currency shift comes 21 months into a war that has devastated the northeast African country's economy and infrastructure, caused famine in some areas, uprooted millions of people and seen the Sudanese pound plunge.

From 500 pounds to the US dollar in April 2023, it now oscillates between 2,000 and 2,500.

Finance Minister Gibril Ibrahim defended the switch, saying it aims to "move money into the banking system, ensure the monetary mass enters formal channels as well as prevent counterfeiting and looted funds."

'More dominant currency'

But analysts say it is less about economics and more about gaining the upper hand in the war between army chief Abdel Fattah al-Burhan and his former deputy Mohamed Hamdan Dagalo, who leads the paramilitary Rapid Support Forces (RSF).

"The army is trying to weaken the RSF by having a more dominant currency," Matthew Sterling Benson at the London School of Economics and Political Science told AFP.

The RSF has banned the new notes in areas it controls, and accused the army of orchestrating a "conspiracy to divide the country."

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AFP