Syrian pound hits new low as neighbouring crisis spills over

The Syrian pound’s value on the black market continued to slide yesterday, hitting 1,000 to the dollar at money changers – a new low for the currency.

The drop comes amid a liquidity crunch in neighbouring Lebanon, which has long served as a conduit for foreign currency entering the heavily sanctioned government-held areas of Syria.

A currency exchange office in the Syrian capital Damascus was selling dollars on the black market for 1,000 pounds for the first time yesterday.

A specialist website put the volatile rate at 975 pounds to the dollar – more than double the central bank’s official rate of 434 pounds.

At the start of the war in 2011, the rate stood at about 48 pounds to the dollar.

In the Old City of Damascus, a trader said everything from food to transport had become more expensive in recent weeks.

“Prices have doubled in the past two months.

“Everybody prices their items according to the new dollar exchange rate” on the black market, he said.

Syria analyst Samuel Ramani said the pound had fallen by 30 per cent since anti-government protests erupted in Lebanon on October 17.

As western sanctions tightened on Syria during the war, many people in the country opened businesses in neighbouring Lebanon, moved their money to its banks and used the country as a conduit for imports.

But Lebanese banks started introducing controls on dollar withdrawals over the summer, straining the supply of the greenback to Syrian markets.

“Lebanese banks are significant for Syria’s economy as they give Syria back-door access to the US dollar,” Mr Ramani said.

“Based on commentaries from Syrian businesspeople, it appears as if the economic crisis in Syria is even worse than that in Lebanon as a result of the protests.”

In Lebanon, black market rates for the Lebanese pound have also slid from the official rate of about 1,507 to the dollar.

Unofficial rates have surpassed 2,000 pounds to the dollar as more people turn to the black market because of bank restrictions.

In another part of Damascus, a 30-year-old man working in a shop that sells computers and mobile phones imported from Lebanon said the store had to increase all its prices.

“In the end, this is going to be reflected in the market and most people won’t be able to pay according to the new prices,” the young salesman said.

“We fear further collapse.” Syria’s eight-year civil war has battered the country’s economy and depleted its foreign currency reserves.

A series of international sanctions have been imposed on President Bashar Al Assad’s regime and associated businessmen since the start of the war in 2011.

Authorities estimate that since then, Syria’s crucial oil and gas sector has suffered $74 billion (Dh271.81bn) in losses. The United Nations estimates the conflict has caused about $400bn in war-related destruction.

It has also killed 370,000 people and displaced millions more, many of whom have fled to neighbouring countries struggling to deal with the influx of people.

An expert said the protests in Lebanon were hitting the Syrian economy even harder than the Lebanese one