DAMASCUS, Syria (North Press) – Before Eid al-Adha, when large sums of remittances, estimated by experts at 800 Million US dollars, were sent into Syria, the value of the dollar and gold relatively dropped. When the flow of remittances stopped, the dollar soared again without clear reasons, whether economic or political, leaving no doubt that someone is completely controlling the exchange rate.
Some linked circulating rumors of raising salaries before the Eid, which did not come true despite being confirmed by members of the People’s Assembly of the Syrian government, and the rise in US dollar after the Eid, nearing 10,000 Syrian Pounds (SYP), to cover for the raise through the gap in exchange rates.
Rasem Khader, a pseudonym of an economic expert, explained to North Press some of what he called “facts” that economic decision-makers have to admit. He noted that liberalizing the exchange rate will lead to an inevitable decline in the value of the US dollar against the Syrian pound. In order for this decline to continue, there has to be an active trade and export movement to maintain the new low exchange rate of the dollar.
Priced in USD
Khader indicated that the exchange rate of the Central Bank of Syria for the dollar “will remain fake as long as it is set only for buying and not selling.” All prices of local and imported goods in the market are priced in the US dollar but are paid for in the Syrian pound.
The imported and local goods, and even agricultural products, are connected to the dollar because a large part is imported. “This fact is rejected by many decision-makers, which in turn leads the Syrian pound to further collapse,” Khader said.
Black market
A member of the Damascus Commerce Chamber pointed out to North Press that “The policy of force cannot maintain the prices fixed in the market. The use of force and threatening imprisonment, and imposing fines will do no good when the US dollar exchange rate and input costs increase. Otherwise, it will result in the disappearance of goods from the market and production of a black market due to the negative, destructive intervention and forcing traders to sell at cost.”
A Ph.D. holder in economics who preferred to stay anonymous said, “The government’s actions contradicts the market movement that is based on the interaction of supply and demand, being the key determiner of prices of all goods.”
The Ph.D. holder in economics pointed out that the market does not follow directives issued by a minister or government authority, regardless of its position. He explained that the fundamental principles of economics stress that markets operate on a scientific rationale derived from the liberalization of markets by removing limiting restrictions.
Automatically dropping
He emphasized the importance of allowing people to operate independently, without any restrictions, so that the value of the dollar can decrease naturally. He emphasized that this should be done across all areas, including factories, market operations, imports, exports, and agriculture.
He proposed establishing a platform for buying and selling the dollar, with its exchange rate being liberalized under the management and supervision of the central bank in collaboration with banks and licensed moneychangers. This would lead to the determination of the actual balance price between supply and demand. Consequently, the exchange rate in the black market would decrease, making the dollar more accessible to everyone.
Criminalizing dealing with the US dollar increases its value beyond its actual worth, he stated.