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Syria's Lira declines as U.S. military strike options increase

Reports about an imminent U.S. strike against the backdrop of the Syrian government's alleged use of chemical weapons has caused panic in the Syrian markets and triggered off a new and sharp decline in the Syrian pound.

 According to media reports, four U.S. Navy destroyers armed with land-attack cruise missiles are positioned in the Eastern Mediterranean Sea. All four warships are equipped with Tomahawk cruise missiles allowing the Pentagon to act rapidly if a military strike is ordered against Syria.

The exchange rate is instantly affected by any political developments regarding the anticipated U.S. strike, according to Dealer in 'Black market', who spoke to EQTSAD on condition of anonymity for fear of reprisals. He expected a dramatic rise of U.S dollar against Lira if the U.S. Congress voted YES to military action.

The source gave example that dollar rose quickly before the G20 summit in St. Petersburg, for up to 250 S.P, and fell quickly when no decision in regard to the military strike was taken.

Therefore, according to the source, dollars could rise up to 350 S.P if the Congress agreed and approved the military action against Syrian regime, basing in his estimation to the fact that U.S dollar reached to 280 S.P when Obama announced his intention to hit the regime.

 The demand on dollar these days is very slow and limited, the source said, the exchange market is looking carefully to the delayed Strike which was assumed to happen last week. However, the opposite will happen, Dealer said if the strike is confirmed, as large number of Syrians from upper middle class and upper class will move to Lebanon and would try to get rid of Syrian pounds they have, which would cause increase in dollar price

 

The U.S. and its allies are considering launching strikes on Syria in response to deadly alleged chemical attacks last week in eastern Ghouta in the countryside of Damascus, which allegedly claimed the lives of hundreds of Syrians.

The anticipated military strike has prompted Syrians to rush to market to buy foods and other necessities, with some Syrians complaining that foodstuff have started to disappear quickly.

The pound, which has been stable for nearly two months following the Central Bank of Syria's positive interventions in the markets, dived on Tuesday from 195 pounds against one U.S. dollar to up to 240 pounds in the black market.

The steep decrease prompted Adib Mayalleh, the governor of the CBS, to issue a statement calling on Syrians not to be deluded by the fake exchange rate of the dollar, noting that there is no demand on the dollar to justify surge.

Syrian economic websites expected that the pound would further decline within the next few hours as political developments are accelerating in Syria.

People say that most of the exchange companies refuse to sell or buy dollars to people, noting that a few of them accept only to buy.

"No one will accept to sell you dollars at this delicate time," said Ahmed, a merchant. "They expect the exchange rate of the dollar to hike soon owing to the expected military strike."

"They have started talking about imaginary figures of up to 270 pounds per dollar," he said.

Even the CBS that sells 1,000 dollars for every citizen per month issued a decision decreasing the amount to 500 only.

The New York Times quoted a senior U.S. administration official as saying Washington was looking at NATO's aerial strikes in Kosovo in 1999 as a blueprint for action against Syria without a UN mandate.

 Xinhua News agency contributed in this report.

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