DAMASCUS: Syria’s central bank set its foreign exchange rate at 15,075 pounds per US dollar on Tuesday for official transactions and for any operations at banks or currency exchanges, devaluing the pound in its second official quotation since Bashar al-Assad’s regime was toppled on Dec. 8.
The Central Bank of Syria had on Monday set the rate at 12,562 per US dollar, the first time it set a rate since Assad’s ouster and offering a unified official exchange rate across official institutions and foreign exchange houses.
Several official rates were used under Assad, including for government transactions like budget calculations, for foreign exchange houses, remittances and United Nations agencies.
There were also black market rates, but using foreign currencies for everyday trade could land Syrians in jail.
Many feared even uttering the word “dollar” in public. Syria has been gripped by an economic crisis in recent years, driven by conflict, tough Western sanctions, a currency squeeze in part due to a financial meltdown in neighbouring Lebanon and Assad’s loss of northeastern oil fields.
A severe devaluation of the Syrian pound pushed most Syrians below the poverty line with meagre public sector wages and the crushing of a number of industries.
Assad’s rapid loss of territory in the days leading up to his ouster from Damascus led to fluctuations in black market rates.
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The Central Bank of Syria’s last currency quote under Assad was on Dec. 5, in which it still had separate rates - 13,668 to the US dollar for banks and financial institutions, and 12,562 as the official rate, used for the state budget.
After he fell on Dec. 8, the Syrian pound appeared to strengthen, with foreign currency traders in Damascus citing rates between 10,000 and 12,500 to the US dollar on Saturday.
With no official rate set by that point, it represented a considerable appreciation on the previous black market rate of 15,000, traders said.
The traders said the return of thousands of Syrians who had sought refuge abroad during the country’s 13-year war and the open use of US dollars and the Turkish lira in markets had contributed to the rise.
Monday’s statements by the Central Bank of Syria unified the official rates and financial institution rates for the first time, and they remained unified in Tuesday’s statements.
Reuters reported on Monday that the country’s gold reserves remained intact despite the war and recent chaos of Assad’s downfall but that the country has only a small amount of foreign currency reserves in cash.
Syria’s new government, picked by the rebels who seized Damascus in a lightning offensive that ended 50 years of Assad family rule, says it will raise wages and prioritise improving services.
The government has also told business leaders it will adopt a free-market model and integrate the country into the global economy in a major shift from decades of corrupt state control, Reuters reported last week.
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