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Damascus Residents Shocked as Syrian Pound Drops to Record Low

Damascus Residents Shocked as Syrian Pound Drops to Record Low

Tuesday, 10 September, 2019 - 06:15

Damascus residents were shocked on Monday after the Syrian pound weakened to its lowest level yet.

The slide and high inflation have led to popular dismay in government-controlled areas.

Traders said it cost as much as 683 Syrian pounds to buy one dollar in the black market on Monday and 680 pounds to sell.

Last Sunday, the pound closed at 691 against the dollar in the streets while it stood at 438 pounds per dollar at the daily benchmark set by the central bank.

The collapse of the currency was mainly felt in government-controlled areas at the start of last fall when the country witnessed a crisis in oil derivatives. The Syrian pound began dropping to 550 against the dollar to later reach 615.

“There is an unprecedented demand on the dollar, and in big quantities,” an employer at a licensed currency-exchange company told Asharq Al-Awsat.

He said the majority of those buyers are merchants. “However, some ordinary Syrians are now exchanging some of their savings in the Syrian lira to the dollar, in fear of a greater collapse of the currency, which might reach 1,000 pounds against the dollar.”

Before the war started in Syria in March 2011, the pound had traded at 47 to the dollar.

Authorities estimate that since 2011, Syria's key oil and gas sector has suffered some $74 billion in losses.

The drop of the Syrian pound has aggravated the purchasing power of many ordinary Syrians, who now struggle to buy basics such as food and power.

A Syrian economist, who wished to remain anonymous, told Asharq Al-Awsat that the collapse of the currency, which has devalued to its lowest levels on the informal market by 45 percent more than a year ago, is mainly due to the expanded US and European sanctions that hit the Syrian government, in addition to the failure of the regime to protect the pound.

The economist said that in such similar cases, the central bank should intervene and inject dollar in the market to stabilize the monetary situation.

“However, the central bank turns a blind eye every time there is a crisis, mainly because it lacks foreign currency reserves,” he said.

The decline might also be tied to the orders issued by the head of the Syrian regime, Bashar Assad, including measures against companies owned by his cousin, Rami Makhlouf, in Syria.

The measures involved Makhlouf’s shares in the state-owned Syrian Telecom Company (Syriatel), the country’s biggest mobile phone company.

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