Damascus- The exchange rate of the Syrian pound has improved since the fall of the Bashar al -Assad regime in a remarkable way, from the level of 28 thousand at the end of the life of the Baath regime to less than 10 thousand pounds in the parallel market.
In this report, Al -Jazeera Net seeks to explore the reasons for the improvement in the exchange rate of Russian currency against the dollar to the point of lowering the parallel market prices without the prices that the Central Bank of Syria proves at 13 thousand and 13 thousand and 130 pounds against the dollar to buy and sell respectively.
Factors improve the Syrian pound against the dollar
In statements to Al -Jazeera Net, it is a list of the reasons that led to the improvement of the Syrian pound against the dollar recently, including:
1- Decrease the width of the lira
The currency exchange rate is mainly affected by supply and demand factors in the exchange markets; If the demand for the offer increases its value, and vice versa, which the Syrian pound was not an exception.
According to the researcher’s saying in the economic affairs, Abdel -Azim Mughrabal:
- Low supply and increased demand was one of the main factors in raising the value of the lira.
- Increasing the activity of commercial movement and promoting commercial activity contributes to the demand for currency and thus its high value.
https://www.youtube.com/watch?v=4o17bzifky
For his part, the economist, Dr. Yahya Al -Sayed Omar, confirms in a comment to Al -Jazeera Net that the Syrian pound has improved since the fall of the regime clearly for several reasons, foremost of which is:
- The delay in the salary of government employees for last January, which led to a decrease in the width of the local currency in the market.
- The decision to dissolve the army of the former regime and its security services, and isolated a large number of fictitious employees from the state institutions contributed to the decrease in the offer of the lira in the market, as a result of their demobilization, and thus the salaries of hundreds of thousands of them were stopped.
2- Improved conditions and supporting international relations
Mr. Omar notes that many Syrians went to save the lira in the hope of its continuous improvement, was another factor in raising its value in the market.
For his part, Syrian economic researcher Iyad Al -Hajji confirms, in a comment to Al -Jazeera Net, that improving the security and political situation may lead to an increase in confidence in the economy, which reduces the escape of capital and enhances demand for the Syrian local currency.
As for the economist, Younis Al -Karim, he confirms that the ability of Syrian President Ahmed Al -Sharaa to make official external visits to countries will open the way for economic gains.
In a comment to Al -Jazeera Net, he adds that the Sharia visit to Saudi Arabia would achieve gains related to supporting the reconstruction process, encouraging investment in Syria, and obtaining loans or financial grants, in order to achieve positive returns on the country’s economy.
It refers to the possibility of the expansion of the visits of the Sharia President, to include ancient countries from the developments that took place in Syria, to encourage them to cooperate with Damascus in all fields, especially those related to the economy, especially after the United States and the European Union reduced the sanctions imposed on Syria.
The Karim affirms that the movement of the international Sharia international may contribute to the flow of international humanitarian aid to the country, to create infrastructure and support the economy.
This week, Ahmed Al -Shara visited Saudi Arabia and Turkey; Saudi Crown Prince Muhammad bin Salman and Turkish President Recep Tayyip Erdogan met.
3- Liquidity imprisonment
Economic researcher Abdel -Azim Al -Maghrib notes that one of the basic factors in improving the exchange rate of the Syrian pound is the government’s resort to the country to a strategy called “liquidity imprisonment” as a cash procedure aimed at reducing the amount of money circulating, through:
- Restricting cash withdrawal from banks.
- Raise the cost of obtaining liquidity.
- Tightening control of financial transactions.
The Maghreb emphasizes that the main idea behind this monetary policy is to reduce the demand for the dollar, and thus slow the deterioration of the exchange rate, in addition to trying to curb inflation by reducing spending and consumption.
4- The return of expatriates
The Moroccan economic researcher notes that the return of expatriates to Syria, pumping large quantities of hard currency and turning it into the lira for local use is one of the main factors in improving the price of the lira.
He adds that the restrictions on dealing with foreign currencies have been reduced to providing greater liquidity than difficult currencies within the markets, as the deal is no longer limited to the system, as it was previously, but also included citizens.
5- Reducing penalties
Among the main factors in the improvement of the indicators of Syria’s economy is the position of the United States and the European Union on the new government, and the suspension or lifting of sanctions, which may be positively reflected in the economy gradually.
On the other hand, American exemptions may encourage regional states to economic dealings with Syria and pump investments under the item of early recovery, which contributes to opening broader horizons for trade, investment and economic wheel.
https://www.youtube.com/watch?v=yd0fbc_f6p8
Will the Syrian pound be improved?
Mr. Omar notes that the improvement witnessed by the Syrian pound so far is not due to direct economic reasons, which makes him completely unstable; The continuous and stable improvement requires a real improvement in economic indicators of production, investment and export, so it cannot be relied upon in an absolute and relying on it in making the decision to save in lira.
But it can be said that the current indicators suggest a high possibility of a real economic improvement in the short and medium periods, according to Omar.
- Continuous economic difficulties
Mr. Omar confirms that the recent improvement in the value of the Syrian pound is linked to several temporary factors and some of them external that led to an increase in demand for it, and not a result of a real economic recovery or an improvement in the structure of the economy, whether by increasing production or reforming the monetary and financial system.
For his part, the Maghrib affirms that the economy still suffers from the absence of real production that can cover the budget deficit and achieve stability in the exchange rates of the lira.
Mr. Omar notes that in light of this reality, it is not advised to rely on the lira as a main savings currency, meaning that it is not advised to buy it in large quantities, and the most appropriate is the distribution of risks through savings in dollars, gold and lira, and that the quantity be the lowest in the lira.
With regard to dollars and gold, if saving for a short period (several months), then the best savings in dollars, but if it is for a long time (more than a year), it is preferable to save in gold, according to the same speaker.
The winners and losers are the improvement of the Syrian pound
Abdel -Azim Al -Maghrib asserts that the most prominent winners of the improvement of the Syrian pound are:
- Imports and merchants, as the improvement of the Syrian pound leads to a decrease in import costs, which may reflect positively on the prices of imported goods.
- Citizens; Where they can benefit from the improvement of the Syrian pound from increasing their purchasing power, especially if the prices of basic commodities are low.
- The government, as it will achieve gains from the high value of the Syrian pound, due to the decrease in the cost of importing diesel and gasoline.
- Tarkers who can take advantage of the opportunity for them to achieve gains from the margin of low exchange rates.
On the other hand, the Maghrib believes that the most prominent losers from the high exchange rate of the lira:
- They are the sources, as Syrian exports become less competitive in global markets due to their high cost.
- Foreign currency holders, individuals and companies, who incur losses due to the decrease in the value of the dollar or other foreign currencies against the Syrian pound.
