Syria halts cellphone imports to shore up forex reserves

Syria has stopped granting licences for mobile phone imports, pro-government media reported Wednesday, in a move the telecoms authority said was meant to shore up tight foreign exchange reserves.

After a decade of war and hit by Western sanctions, Syria is in the grip of a deep economic crisis with a plummeting currency, the pain deepened by the coronavirus pandemic and a financial crunch in neighbouring Lebanon.

In one of the government responses, "the economy ministry has issued a decision banning the import of mobile phones until further notice", Al-Watan newspaper said on its website.

"As per the decision, no import licences will be granted for such devices."

In a separate report, Al-Watan said the import ban was part of a series of new measures taken by the government to stem the devaluation of the Syrian pound against the US dollar.

They include "the halting of imports of several products that are considered luxuries and can be dispensed with for several months, such as mobile phones," the daily said, citing a financial source.

On Tuesday, the telecoms authority said the supply of mobile phones to Syria was three times larger than the number of users registered on its networks.

"There are enough mobile phones for all current subscribers as well as those who would like to subscribe" in the future, it said.

It said a ban on registering new phones on its networks, which came into effect on March 18, would last for six months.

Any new cellphone that has since joined the network would be blocked immediately, it added.

The decision, according to the telecom authority, was meant "prioritise the import of basic goods that are essential for citizens".

It also "aims to direct the focus of the government's efforts towards the needs of citizens".

Amid the economic crisis, the Syrian pound, which officially trades at 1,256 to the dollar, sold for more than 4,000 on the black market last week, an all-time low.

Read also: Syrian pound hits record low against dollar

The latest import ban immediately caused mobile phone prices to climb on Wednesday, according to traders in Damascus.

"Prices are naturally going to go up" because demand would exceed supply, said Gerios, a 33-year-old mobile store owner.

"A phone model we sell today can't be replaced easily, which gives merchants more leeway to control prices," he added.

An economist in Damascus who spoke to AFP on condition of anonymity said the point of the import ban was to "divert dollars reserved for cellphone imports to fund essential goods".

The decision would have temporary benefits, he said, as demand for the greenback briefly slows.

But a Syrian tech expert living in Turkey said "the government is trying to restrict the mobile phone market to its business affiliates".

"This will force people to buy phones from companies with links to authorities, at a price controlled" by these businesses, he told AFP on condition of anonymity.

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