The relationship of bank financing to inflation in Sudan during the period 2008-2019

Hammaoui Mebarka , Abderrahmane Abdelkader

Abstract

His study aims to analyze and measure the relationship between bank financing and inflation in Sudan through a standard study of quarterly data using the autoregressive methodology for the distributed slow periods during the period (2008-2019) . The descriptive and analytical approach was relied upon to explain the developments of variables during the studied period, as the study showed that the banking system in Sudan is based on the principles of Islamic Sharia and all Islamic bank finance, and the study period witnessed a continuous increase in the flow of bank finance, as it multiplied 17 times during this period, even if its intensity varies from year to year. This rise is attributed to structural problems that have accompanied the Sudanese economy for a long time. The growing government spending played a major role in the rise in inflation, especially since this spending is not matched by real production as it is financed by an increase in supply. Money, as the results of the standard study showed that there is a causal relationship in one direction of inflation towards bank financing It also showed that there is a long-term equilibrium relationship between bank financing and inflation, and that 15.50% of the imbalances in inflation rates are corrected during each quarter by bank financing, and that bank financing in Sudan has a very weak impact on inflation, meaning that the rise that Inflation experienced was due to other variables