New record low for Syrian pound on black market

(AFP, Zaman Al Wasl)- The value of the Syrian pound against the dollar has fallen again to its lowest rate in history on Sunday, following a week of sharp collapse.

On the black market on Sunday, the pound was trading at 690 against the dollar.

At the start of the Syrian revolution in March 2011, the rate stood at around 48 pounds per dollar.

Report economic publication says the drop in value was due to a number of factors.

The devaluation over the past few weeks was likely linked to heightened demand for dollars in neighbouring Lebanon, whose banking system Syrian importers use for their own transactions, it said.

Higher dollar demand in Lebanon has been driven by concerns about a potential looming devaluation of the Lebanese pound, it added.

It might also be tied to rumours in recent days of tensions between Bashar al-Assad and his cousin Rami Makhlouf, an influential investor, it said.

The official exchange rate on Sunday stood at 434 Syrian pounds to the dollar, the central bank's website showed.

Syria's eight-year civil war has battered the country's economy, and depleted its foreign reserves.

"The trade balance is in the red as the local production capacity is largely destroyed and imports are needed to meet local demand," Syria Report said.

A flurry of international sanctions have targeted the Assad's regime and associated businessmen since the start of the war in 2011.

Authorities estimate that since 2011, Syria's key oil and gas sector has suffered some $74 billion in losses.

The United Nations estimates the conflict has caused some $400 billion in war-related destruction.

The rapid depreciation of the Syrian pound has caused a further decline in the living standards of ordinary Syrians and threatens the continued functioning of what remains of the state, according to Carnegie Think Tank.

Aron Lund in a report published by the veteran Middle East Center in 2016 says: If the formal economy proceeds to break down in more fundamental ways than it has already, if the SYP loses even more of its purchasing power, and if state institutions cede ground to private charities, the black market, and militias, then the Assad regime will continue to evolve from an institutional state apparatus into a coalition of warlords. While tragic for Syria, such a development is especially dangerous for Assad himself, since his long term strategy is predicated on an ability to present himself as the last barrier against a permanent state collapse in Syria.

Reversing the decline of the government’s financial writ is therefore just as important to Bashar al-Assad as winning the battles on the ground. So far, he has seemed considerably more successful at the latter than the former.

Eight years of war in Syria have killed 560,000 people and driven half the pre-war population of 22 million from their homes, including more than 6 million as refugees to neighbouring countries.

Zaman Al Wasl