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Home / Business News / Syria devalues currency amid chaos ahead of new US sanctions

Syria devalues currency amid chaos ahead of new US sanctions

The sanctions, known as the US Caesar Syria Civilian Protection Act, are the toughest set of measures to be imposed on Syria yet, with the names of the first wave of targeted individuals expected to be announced later Wednesday.

business Updated: Jun 17, 2020 19:32 IST
Associated Press| Posted by: Harshit Sabarwal
Associated Press| Posted by: Harshit Sabarwal
Damascus, Syria
On Wednesday, the Central Bank announced a devaluation of the pound, raising the official exchange rate from 704 to 1,256 pounds to the dollar in an effort to ease the pressure on the black market and encourage the use of official channels for transactions.
On Wednesday, the Central Bank announced a devaluation of the pound, raising the official exchange rate from 704 to 1,256 pounds to the dollar in an effort to ease the pressure on the black market and encourage the use of official channels for transactions.(AFP file photo. Representative image)

Syria devalued its currency by 44 per cent on Wednesday, announcing a new official exchange rate for the pound amid chaos in the market, hours before new US sanctions aimed at cutting off revenue for Syrian President Bashar Assad’s government were expected to take effect.

The sanctions, known as the US Caesar Syria Civilian Protection Act, are the toughest set of measures to be imposed on Syria yet, with the names of the first wave of targeted individuals expected to be announced later Wednesday. The sanctions prevent anyone around the world from doing business with Syrian officials or state institutions or from participating in the country’s reconstruction.

Syria’s already troubled economy has sharply deteriorated, prices have soared and the national currency, the Syrian pound, collapsed in recent weeks, partly because of fears that the sanctions would further isolate the war-ravaged country.

Experts say the new sanctions will be a heavy blow to a nation where more than 80% of the people already live in poverty, according to the United Nations. Syrian government officials have called it “economic terrorism.” This week the Syrian currency dropped to a record 3,500 pounds to the dollar on the black market — compared to 700 for $1 at the beginning of the year. Some staples such as sugar, rice and medicine are becoming hard to find and some people have started stacking food supplies out of fear their prices would increase.

On Wednesday, the Central Bank announced a devaluation of the pound, raising the official exchange rate from 704 to 1,256 pounds to the dollar in an effort to ease the pressure on the black market and encourage the use of official channels for transactions. The price on the black market, according to unofficial social media pages, neared 2,825 pounds for a dollar.

The economic meltdown presents a serious challenge for Assad, who survived more than nine years of war but rules over a crumbling infrastructure and ravaged economy. The hardship has triggered new protests in government-controlled areas, including some where angered residents even called for his downfall.

“The (Caesar) Act aims at pitting the Syrian citizen against the government. The law is an invitation to inner discord and chaos,” said Safwan Qurabi, a member of Syria’s parliament. He said the government was taking measures, including adopting a more flexible economy, to deal with these sanctions.

Ziyad Ghoussen, a Syrian journalist who reports on the economy, said the new US sanctions are expected to increase the suffering of Syrians, making it more difficult to obtain basic needs and throwing even more people into poverty.

ht epaper

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