Central Bank raises exchange rate of "remittance dollar", expert warns of more hardships

Pro-regime economic analysts predicted that the Central Bank's decision to raise the exchange rate of remittance dollars by 14 percent, will lead to opening the borders of inflation in the Syrian market, which will cause more suffering for the residents of regime-held areas.

 

The Central Bank on Thursday raised the exchange rate of the remittance dollar from 2,500 pounds to 2,800 pounds, indicating that the aim of the increase was to encourage expatriates and international organizations to send money from abroad, through regular methods.

 

Expert Amer Shahda, in an interview with pro-regime Hashtag Syria website, said if the move is intended to encourage the expatriate to send remittances through official methods, this step will not help because remittances will decline as a result of the increase in inflation globally, especially in Europe, which will be reflected primarily on the expatriates because of their high burdens of living. 

 

Also, the effect of these remittances is zero on the expatriate’s family and relatives, because inflation crushes everything and prevents them from improving their living situation, because the importer gets the dollar at a low price, then doubles it and increases his profits and then sells his products to the residents, Shahda added.

  

He also referred to the impact of financing the deficit estimated at about 5 trillion pounds, which doubled the cash on paper without actually doubling it, wondering: Is this step intended to increase the contraction in the national currency bloc?

 

The increase in the official price will be offset by a double increase in the parallel market, and therefore the citizen will go to receive his money transfer from that market, especially since the increase in the price of transfers did not reflect positively the residents' living conditions.

 

Shahda suggested abandoning financing the traders' imports and loosening the restrictions on dealing in dollars because the previous method was not feasible during the crisis.

 

As for the step to raise the interest rate, the economist explained that the justification for the step was to attract deposits to banks, but the question here is who will be convinced to put his money in the banks with that interest with the presence of catastrophic inflation levels that far exceed the benefits that the depositor will reap if we do not say losses resulting from that inflation .

 

Shahda pointed out that the Central Bank issued a statement about two weeks ago focusing on reducing inflation rates and supporting production with local resources, wondering: How did it issue something that contradicts its decisions?