https://arab.news/24n5z
- Syria is in the thick of an economic crisis compounded by a coronavirus lockdown and a dollar liquidity crunch in neighboring Lebanon
- The UN food agency said any further depreciation risked increasing the cost of imported basic food items
BEIRUT: Syria鈥檚 pound hit record lows on the black market Saturday trading at over 2,300 to the dollar, less than a third of its official value, traders said, ahead of new US sanctions.
Three traders in Damascus told AFP by phone that the dollar bought more than 2,300 Syrian pounds for the first time, though the official exchange rate remained fixed at around 700 pounds to the greenback.
After nine years of war, Syria is in the thick of an economic crisis compounded by a coronavirus lockdown and a dollar liquidity crunch in neighboring Lebanon.
Last month, the central bank warned it would clamp down on currency 鈥渕anipulators.鈥�
Analysts said concerns over the June 17 implementation of the US Caesar Act, which aims to sanction foreign persons who assist the Syrian government or help in post-war reconstruction, also contributed to the de fact devaluation.
Zaki Mehchy, a senior consulting fellow at Chatham House, said foreign companies 鈥� including from regime ally Russia 鈥� were already opting not to take any risks.
With money transactions requiring two to three weeks to implement, 鈥渢oday鈥檚 transactions will be paid after June 17,鈥� he said.
Heiko Wimmen, Syria project director at the conflict tracker Crisis Group, said that with the act coming into force, 鈥渄oing business with Syria will become even more difficult and risky.鈥�
Both analysts said the fall from grace of top business tycoon Rami Makhlouf despite being a cousin of the president was also affecting confidence.
鈥淭he Makhlouf saga is spooking the rich,鈥� Wimmen said.
After the Damascus government froze assets of the head of the country鈥檚 largest mobile phone operator and slapped a travel ban on him, the wealthy feel 鈥渘obody is safe,鈥� he said.
They are thinking 鈥測ou better get your assets and perhaps yourself out preparing for further shakedowns,鈥� he said.
Mehchy said the impact of the pound鈥檚 decline and ensuing price hikes on Syrians would be 鈥渃atastrophic.鈥�
Most of Syria鈥檚 population lives in poverty, according to the United Nations, and food prices have doubled over the past year.
The UN food agency鈥檚 Jessica Lawson said any further depreciation risked increasing the cost of imported basic food items such as rice, pasta and lentils.
鈥淭hese price increases risk pushing even more people into hunger, poverty and food insecurity as Syrians鈥� purchasing power continues to erode,鈥� the World Food Programme spokeswoman said.
鈥淔amilies may be forced to cut the quality and quantity of food they buy.鈥�