(Eqtsad)- Two weeks after its rectification, the Syrian pound has one again collapsed dramatically, its value reaching 4000 to one US dollar. The exchange rate of the pound is likely to hit a new low in light of the Central Bank’s operations to reap more profit by interfering in the float market.
The decline in demand for the pound can be linked to a temporary and rapid decline in basic commodities in Damascus. The pound has fallen by around 40% this year alone.
It costs close to 4,000 to buy one dollar on the street as the Central Bank values one dollar for 1250 SYP. The pound had traded at 47 to the dollar before protests against Bashar al-Assad erupted in March 2011.
Sources told Eqtsad that people had been optimistic over the past week after the correction of the pound to acceptable rates, which they hoped would be reflected in the prices. However, the decrease of prices did not last long, and soon inflation soared again.
In order to temporarily reduce the exchange rate between the dollar and the pound, the regime reduced the demand for goods by eliminating the difference between the prices of subsidized materials and market prices, leading more than 80% of the population with limited income to boycott these items, thus increasing the value of the pound.
The pound’s collapse has driven up inflation and aggravated hardship as Syrians struggle to afford food, power and other basics, according to Reuters.
The apparent purpose was, according to official media outlets, to introduce a permanent correction of the pound and to decrease the prices of basic goods. However, with the new sudden collapse, it became clear that this variation is yet another deal for the Central Bank aimed at collecting huge profits.
Contrary to the usual, the last opposition stronghold in northern Idlib province, which is leading at the black market, has not contributed to any significant change in the exchange rates. An inspection by Eqtsad correspondent of money changers in the town of Idlib revealed an absence of the Syrian pound.
Unlike the other areas outside Assad’s control, Idlib seems to gradually turning from being a main controller of the exchange market into an ineffective marginal market. Recently, it has witnessed radical changes in the circulation of currency, introducing huge amounts of Turkish pound into the market. Purchase and shipping operations are carried out through the branches of the Public Institution of Cash Management in cooperation with the region's money changers.
Sources from the field of exchange indicate that the scarcity of the Syrian pound will broaden the disparity between the values of the dollar in Damascus and in Idlib, in favor of the latter. However, this does not ultimately indicate the strength of the market in Idlib, but rather its withdrawal from it.