Syrian pound hits lowest value since start of war

Syria's official exchange rate reached 512 Syrian pounds to the US dollar on Sunday, hitting its lowest value since the start of the country's conflict.

Society

3 min read

The New Arab & agencies

09 May, 2016

Falling export revenues and declining reserves had caused the currency's significant depreciation [Getty]

Syria's currency hit its lowest value since the start of the country's five-year conflict on Sunday, having depreciated more than 92 percent.

"It's the first time the exchange rate against the US dollar has reached this level since the beginning of the conflict," economist Firas Haddad told AFP.

The black market exchange rate was 625 pounds to the dollar on Sunday compared with 48 pounds a dollar in March 2011, he said.

Sunday's official exchange rate was 512 Syrian pounds to the dollar, according to the central bank in Damascus.

In early April, the black market was 500 Syrian pounds to the dollar and the official rate was 462.

"Black market speculation unfortunately sets the exchange rate" and central bank meetings have failed to provide a mechanism to regulate it, Haddad said.

The currency’s latest depreciation coincided with the beginning of "military operations" in the northern battleground city of Aleppo last month, he said.

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At least 300 civilians including women and children were reported killed in the divided city from April 22 before a fragile truce took hold there on Thursday.

When the uprising against President Bashar al-Assad's regime began in 2011, the head of the central bank said Syria had reserves of some $18 billion, but experts say much of that has been used.

The World Bank said last month that these reserves had dropped to $700 million by the end of last year.

It said the "severe decline in oil receipts since the second half of 2012 and disruptions of trade due to the conflict" had put pressure on the exchange rate.

Falling export revenues and declining reserves had caused the currency's "significant depreciation", it added.

In Aleppo city's rebel-held east on Sunday, the cost of living had increased since the freeze in fighting there took hold on Thursday.

The price of a kilo of tomatoes had risen from 200 to 300 Syrian pounds in three days, and the cost of a litre of fuel rose from 400 to 450 Syrian pounds.

As well as devastating the economy, the conflict has killed more than 270,000 people and displaced millions.