(Eqtsad)- From where is the Syrian currency entering the opposition-held northwestern areas, specifically the newly issued 2,000-pound banknote and how exactly did it invade the markets so quickly?
These questions have dominated the Syrian North for the past weeks, especially with the crossings of the region being closed.
Despite the absence of clear answers, Eqtsad business news site used multiple sources to reach a conclusion concerning the matter. A well-infomed source said the currency is smuggled through the Syria-Turkey border crossings.
Large amounts of the Syrian currency are often shipped in through trucks loaded with goods.
The entry of the currency through crossings is not prohibited, “But only in small amounts. So large sums are being smuggled by the currency traders under the goods,” he added.
According to the source, these large amounts arrive by sea to the city of Mersin, often via ships from the Lebanese ports.
A second source has confirmed the information, saying that some regime smuggling networks are securing their transportation to Turkey. These networks sell the currency to traders in Turkey, at a cheaper rate than in the regime’s exchange market.
“However, another section enters from land crossings that link the north to regime areas, illegally and through limited smuggling operations.”
The Syrian pound started 2019 at around S£500 to the dollar, but started to spiral downwards in the autumn and in recent weeks has crashed below S£1,000, according to Financial Times.
Joseph Daher, a Syrian-Swiss economist told Financial Times that the pound’s decline highlights the vulnerability of Syrian markets to shocks, notably the worsening banking crisis and dollar shortage in neighbouring Lebanon which has disrupted Syrian imports, strangled remittances from Syrian refugees and sparked panic in Syrian foreign exchange markets.
In early 2016, the International Monetary Fund estimated that Syria had $1bn in foreign currency holdings, while the World Bank estimated them to be as low as $700m, down from $20bn in 2010.
By the beginning of 2019, the pound had reached S£535 to the dollar, sliding to S£663 in October as Lebanon tightened up its foreign transfers and cracks in the Lebanese financial system started to show.
On 17 October, an uprising broke out in Lebanon, leading the banks to shut their doors for two weeks, subsequently imposing unofficial capital controls and limiting withdrawals in US dollars.
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