Syria’s New Central Bank Chief Vows to Boost Bank Independence Post Assad

A bank teller counts Syrian pound banknotes at the Syrian Central Bank in Damascus, Syria, 09 January 2025. (EPA)
A bank teller counts Syrian pound banknotes at the Syrian Central Bank in Damascus, Syria, 09 January 2025. (EPA)
TT
20

Syria’s New Central Bank Chief Vows to Boost Bank Independence Post Assad

A bank teller counts Syrian pound banknotes at the Syrian Central Bank in Damascus, Syria, 09 January 2025. (EPA)
A bank teller counts Syrian pound banknotes at the Syrian Central Bank in Damascus, Syria, 09 January 2025. (EPA)

Syria's new central bank governor, Maysaa Sabreen, said she wants to boost the institution's independence over monetary policy decisions, in what would be a sea change from the heavy control exerted under the Assad regime.

Sabreen, previously the Central Bank of Syria's number two, took over in a caretaker role from former governor Mohammed Issam Hazime late last year.

She is a rare example of a former top state employee promoted after Syria's new rulers' lightning offensive led to President Bashar al-Assad's fall on Dec. 8.

"The bank is working on preparing draft amendments to the bank's law to enhance its independence, including allowing it more freedom to make decisions regarding monetary policy," she told Reuters in her first media interview since taking office.

The changes would need the approval of Syria’s new governing authority, though the process is at this stage unclear. Sabreen gave no indication of timing.

Economists view central bank independence as critical to achieve long-term macroeconomic and financial sector stability.

While the Central Bank of Syria has always been, on paper, an independent institution, under Assad's regime the bank's policy decisions were de facto determined by the government.

Syria's central bank, Sabreen added, was also looking at ways to expand Islamic banking further to bring in Syrians who avoided using traditional banking services.

"This may include giving banks that provide traditional services the option to open Islamic banking branches," Sabreen, who has served for 20 years at the bank, told Reuters from her office in bustling central Damascus.

Limited access to international and domestic financing meant the Assad government used the central bank to finance its deficit, stoking inflation.

Sabreen said she is keen for all that to change.

"The bank wants to avoid having to print Syrian pounds because this would have an impact on inflation rates," she said.

Asked about the size of Syria's current foreign exchange and gold reserves, Sabreen declined to provide details, saying a balance sheet review was still underway.

Four people familiar with the situation told Reuters in December that the central bank had nearly 26 tons of gold in its vaults, worth around $2.2 billion, some $200 million in foreign currency and a large quantity of Syrian pounds.

The Central Bank of Syria and several former governors are under US sanctions imposed after former Assad’s violent suppression of protests in 2011 that spiraled into a 13-year civil war.

Sabreen said the central bank has enough money in its coffers to pay salaries for civil servants even after a 400% raise promised by the new administration. She did not elaborate.

Reuters reported that Qatar would help finance the boost in public sector wages, a process made possible by a US sanctions waiver from Jan. 6 that allows transactions with Syrian governing institutions.

INFLATION CHALLENGE

Analysts say stabilizing the currency and tackling inflation will be Sabreen's key tasks - as well as putting the financial sector back on a sound footing.

The Syrian currency's value has tumbled from around 50 pounds per US dollar in late 2011 to just over 13,000 pounds per dollar on Monday, according to LSEG and central bank data.

The World Bank in a report in spring 2024 estimated that annual inflation jumped nearly 100% year-on-year last year.

The central bank is also looking to restructure state-owned banks and to introduce regulations for money exchange and transfer shops that have become a key source of hard currency, said Sabreen, who most recently oversaw the banking sector.

Assad's government heavily restricted the use of foreign currency, with many Syrians scared of even uttering the word "dollar".

The new administration of de facto leader Ahmed al-Sharaa abolished such restrictions and now locals wave wads of banknotes on streets and hawk cash from the backs of cars, including one parked outside the central bank's entrance.

To help stabilize the country and improve basic services, the US last week allowed sanctions exemptions for humanitarian aid, the energy sector and sending remittances to Syria, although it reiterated the central bank itself remained subject to sanctions.

Sabreen said allowing personal transfers from Syrians abroad was a positive step and hoped sanctions would be fully lifted so banks could link back up to the global financial system.



Oil Dips as Economic Concerns, Supply and Demand Expectations Weigh

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
TT
20

Oil Dips as Economic Concerns, Supply and Demand Expectations Weigh

A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo
A pumpjack brings oil to the surface in the Monterey Shale, California, US April 29, 2013. REUTERS/Lucy Nicholson/File Photo

Oil prices slipped on Thursday after surging in the previous session on a larger-than-expected draw in US gasoline stocks, as markets weighed macroeconomic concerns and demand versus supply expectations. Brent futures were down 30 cents to $70.65 a barrel at 1140 GMT, while US West Texas Intermediate crude futures fell 31 cents to $67.37 a barrel.

Both benchmarks rallied about 2% on Wednesday after US government data showed tighter-than-expected oil and fuel inventories.

US gasoline inventories fell by 5.7 million barrels, more than the 1.9 million-barrel draw expected by analysts, while distillate stocks also dropped more than anticipated, despite gains in crude stocks, Reuters reported.

"Declining US gasoline inventories raised expectations for a seasonal demand increase in spring, but concerns about the global economic impact of tariff wars weighed on the market," said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.

"With strong and weak factors progressing simultaneously, it has become difficult for the market to lean decisively in one direction or the other," he added. US President Donald Trump threatened on Wednesday to escalate a global trade war with further tariffs on European Union goods, as major US trading partners said they would retaliate for trade barriers already erected by the US president.

Trump's focus on tariffs has rattled investors, consumers and business confidence, and raised US recession fears. With the US president's stated commitment to cheaper oil, Citi analysts said their outlook for Brent by the second half of 2025 is $60 a barrel.

Global oil supply could

exceed demand

by around 600,000 barrels per day this year, the International Energy Agency said on Thursday, revising down its 2025 demand growth forecast. Meanwhile, the Organization of the Petroleum Exporting Countries said on Wednesday that Kazakhstan led a sizeable jump in February crude output by the wider OPEC+, highlighting a challenge for the producer group in enforcing adherence to agreed output targets, even as it intends to unwind production cuts.

Worries about flagging jet fuel demand weighed further on markets, with JP Morgan analysts saying that US Transportation Security Administration data showed "passenger volumes for March have decreased by 5% year-over-year, following stagnant traffic in February".

However, recent firm global demand numbers limited overall market weakness.

"As of March 11, global oil demand averaged 102.2 million barrels per day, expanding 1.7 million barrels per day year-over-year and exceeding our projected increase for the month by 60,000 barrels per day," the JP Morgan analysts added.