Syria's 'Lira' continues sliding down against Dollar, losing 175 % of its value

Syria's pound -lira- has continued to slide against the dollar, losing as much as 175% of its value in the black market since the outbreak of Syrian revolution against the Assad regime March 2011.

The pound is trading at a rate of about 115 to the US dollar according to central bank data, while in the black market the rate has reached as high as 210. The pound used to trade at about 47 to the dollar before the uprising in 2011.

Syrian banks witnessed today a hysteric movement of cash withdrawals of Syrian pounded by the clients according to collapse of Syrian pound in front of Dollar, what makes dollar exceeded 210 SP that portends a wave of sharp rises in prices, especially with the continuation of the unfixed prices of the Syrian goods, in light of the stability of the income of the citizen "15 thousand Syrian pounds per month, only about $ 78," according to Eqtsad (Business website affiliated with Zaman Alwasl).

"The fierce war against Syria and its people is the primary reason behind the decline in the exchange rate," Central Bank Governor Adib Mayaleh said in an interview with state-run television two months ago.

The central bank will "take several measures to protect the pound and will issue certificates of deposits with high interest rates," to prop up the currency, he added.

Months ago, Russia and China have helped support the Syrian economy and a $1bn credit line from Iran has helped back the exchange rate regime of the pound as the two-year rebellion against the Assad takes its toll on the country's industries and investment falls, while sanctions limit export capacity, according to the Arabian Business Magazine.

 Syria's economy will shrink by about 15 percent this year compared to a contraction of 20 percent in 2012 and 6 percent in 2011, the Institute of International Finance (IIF) said in a report earlier this month.

 The economy's nominal size is projected to drop to US$27bn in 2013 compared with US$57.5bn in 2010 prior to the revolt against the Syrian leader, as tourism receipts and foreign direct investment dry up, the IIF said.

Tourism receipts accounted for around 11 percent of gross domestic product in 2010, while FDI in 2010 was at US$1.5bn.

 The country's fiscal deficit, financed mostly by domestic banks, is forecast to widen to 13 percent of GDP in 2013 compared with 16.3 percent last year as the government increases spending and tax revenue and oil receipts decline, the IIF said.

 Syria's foreign currency reserves are projected to plunge to US$2.1bn, enough to cover one month of imports, compared with US$5.6bn at the end of last year, the IIF said. The central bank had about US$18bn in foreign currency reserves prior to the outbreak of violence in the southern part of the country.

(Eqtsad and Arabian Business contributed in this Report)

Editing by Mohamed Hamdan