Damascus – The exchange rate of the dollar against the Syrian pound in the parallel market suddenly fell to levels lower than the price offered by the Central Bank, which set the exchange rate of the US currency at 13 thousand pounds for purchase and 13 thousand and 130 pounds for sale as of the writing of this report.
The price of the dollar in Damascus markets reached 11,200 liras for purchase and 11,500 liras for sale, while the price of the US currency fell slightly below this level against the Syrian currency in Idlib and Al-Hasakah.
This comes after the United States issued a decision to facilitate financial transfers to Syria, whether for humanitarian purposes or to support individuals, allowing the flow of hard currencies towards the country, which began to be directly reflected in the exchange rate of the Syrian pound.
These developments come in light of the challenges that the Syrian economy is witnessing as a result of cumulative political and economic factors, and mistakes caused by the previous regime in its management of the economic process.
Over the course of 14 years, the economy suffered from a decline in indicators at all levels, after the previous regime mortgaged all the country’s capabilities to strengthen its authority and support those close to it.
Price in the parallel market
Syrian economic expert, Younis Al-Karim, says that prices below the central bank exchange rates are sweeping the parallel exchange markets, which is a rare case, and he attributes this to:
- Behavior taken by the Central Bank, which asked Syrian banks and institutions not to pump the lira into the markets, and thus forced merchants and factory owners to sell the dollar in exchange for obtaining the lira from the parallel market to cover their expenses.
- The government is holding on to limited quantities of the lira to fulfill its commitment to pay the increase in employees’ salaries by an increase of up to 400% as of February 2025, which has increased the government’s demand for the lira.
- The supply of dollars increased, and the central bank held onto lira reserves, which explains the sudden situation witnessed in the parallel exchange markets in Syria.
Impact of US exemptions
The US exemptions include, in addition to facilitating the transfer of funds, the possibility of importing energy resources necessary for the production process in vital sectors such as industry and agriculture.
The economic expert and director of the Trends Center, Yahya Al-Sayyid Omar, confirmed that the exemptions will contribute to strengthening economic indicators and facilitate the conduct of banking transactions by Syrian banks, which reduces the severity of inflation, stimulates internal and external trade, reflects positively on the value of the Syrian pound, and increases its purchasing power, which leads to… Naturally, the level of per capita income increases and improves living conditions.
On the other hand, US exemptions may encourage regional countries to deal economically with Syria and pump investments under the heading of early recovery, which contributes to opening broader horizons for trade, investment, and the economic wheel.
However, the decision is not without negatives, as the United States has not canceled the sanctions. Rather, they are merely temporary exemptions, which indicates the existence of conditions on the caretaker government.
According to Younis Al-Karim, the impact of this on the Syrian economy can be explained in two paths:
- First trackIt is possible that the United States linked the exemption to monitoring the behavior of the new government and achieving a political transition, and the government’s commitment to the conditions may prompt the United States to extend the exemption, which will reflect positively on the value of the lira.
- The second pathThe government’s failure to adhere to the conditions may lead to the United States freezing the exemption decision, which will reflect negatively on the value of the Syrian pound.
Al-Karim stressed that the individual money transfers included in the exemption will not have an effective impact on the Syrian economy, due to the existence of transfer channels that Syrians are accustomed to, which are less expensive than transferring through banks. He pointed out that Syrian banks are still unable to deliver transfers in dollars.
The future of the Syrian pound
Economist Dr. Al-Sayed Omar says that raising the import customs tariff issued by the government on January 10, 2025 achieves many goals as follows:
- Stimulating production and investment, which appeared through reducing customs duties on industrial materials such as metals of all kinds, with a complete exemption for specific goods such as heavy machinery used in reconstruction.
- Protecting the national product, by raising duties on products of foreign origin, because exempting them from customs means putting the national product in competition with products from other countries, and may end in a major loss for the economy, so duties must be imposed on them.
- Limiting the import of luxury items, as they drain the dollar.
Omar stressed that these measures will improve the indicators of the national economy and will lead to an increase in the production rate, moving the economic wheel, and improving the exchange rate of the lira.
But Younis Al-Karim believes that raising the customs tariff will reduce the value of the lira against the dollar, and raise inflation levels and the poverty rate in the country.
In support of the value of the Syrian pound, Al-Karim stressed the importance of the Arab countries accepting to deal with the new government and supporting it with financial aid that improves the value of the lira.
Mr. Omar stressed the importance of adopting the Syrian pound as a single currency in trading and carrying out buying and selling operations, and warned against adopting the dollar alongside the Syrian pound as an official currency in the country, due to the inability of the Central Bank to achieve a balance in supply and demand for the amount of the dollar in the markets, as the rise in the amount of dollars will increase. Demand for the US currency pressures the exchange rate of the Syrian pound.
It is expected that the lira and the Syrian economy will face challenges in the short and medium term, as the country needs to pass many stages and challenges to reach the point of stability at which the stage of development and economic empowerment begins.
