DAMASCUS, Syria (North Press) – The exchange rate of a country’s local currency is a vital indicator of economic health and stability. In Syria, monitoring the value of the Syrian pound against the US dollar has become a daily routine that determines market activity and the fate of commercial transactions.
In recent months, the exchange rate has entered a cycle of sharp and rapid fluctuations, witnessing significant rises and falls over short periods, without stabilizing at a level long enough to restore confidence or allow for sound planning.
These fluctuations are no longer just figures announced by exchange offices or displayed on screens; they have become a direct source of pressure on all aspects of economic life. They affect the prices of both essential and non-essential goods, determine people’s ability to secure their needs, and pose a direct threat to traders’ capital and business continuity, especially those dealing in imported goods or products linked to global exchange rates.
Speculation and manipulation
In this context, economic expert and Secretary of the Consumer Protection Association, Abdul Razzaq Habza, told North Press, “In a deteriorating economy, rumors and international and regional decisions directly affect the exchange rate of the pound. In the absence of a clear government policy, this leads to price volatility, creating opportunities for speculators to further manipulate the exchange rate.
“As for the Caesar Act, lifting US sanctions does not have an immediate effect on lowering the exchange rate, but due to the psychological impact, it led to a temporary decline. This is therefore an illusory and unreal rate, because improvement and stability of the pound are linked to movement in the national economy.”
Habza pointed out that “the direct and primary cause is internal, driven by traders who withhold goods and prices from the market. Agreements among some traders lead first to higher prices and second to discrepancies in the official exchange rate. For example, the government prices fuel and oil in dollars, while the dollar itself is unstable, yet sets a fixed rate of 11,500 Syrian pounds at the Central Bank. This indicates that government bodies are operating with two exchange rates, which is a flaw in economic management. The weakest link here is the citizen.”
He explained that some traders add a margin “for instance, if the exchange rate is 11,000 or 12,000, they deal as if it were 13,000 or 14,000 as a precaution due to their lack of confidence in the Syrian pound.” Some wholesale, semi-wholesale, and retail traders also resort to WhatsApp groups to inform each other of moment-by-moment changes in product values in dollars while selling them in Syrian pounds.
Habza believes that solutions contributing to currency and economic stability begin with government support for local production, raw materials used in manufacturing, and farmers’ basic needs, in addition to supporting traders and industrialists by reducing customs duties and taxes. He also called for canceling the decision to raise electricity prices, warning that higher electricity costs would add to commodity prices and ultimately burden citizens.
Daily losses and sluggish trade
From inside the Hamidiyah Market, trader Fawaz Akkad told North Press, “The instability of the pound causes problems and disruptions in the market. Rising and falling rates disrupt commercial transactions, and even fluctuations within the same day lead to confusion in pricing goods. Since the fall of the al-Assad regime, we have demanded that the Damascus chambers of Industry and Commerce ensure stability of the pound against the dollar, but the response is always that ‘We don’t control it,’ and that the country lacks stability.”
Akkad added, “At the Central Bank, the rate is 11,500 Syrian pounds, while on the black market it is 11,700 or 11,800 and more. This gap between the two rates causes confusion in pricing available goods and products. When the exchange rate rises, the consumer suffers, and when it falls or the pound improves, the trader suffers if they previously bought goods at a high rate. Today, some traders add extra value above the dollar rate to protect themselves from sudden increases. In some cases, this is justified, as they may have purchased goods at 12,000 and then the rate rose to 12,200, so the added margin helps offset losses in goods and capital.”
Meanwhile, trader Tareq Jano explained to North Press, “Stability in the exchange rate is best for the Syrian economy and for transactions between people. Some citizens delay their purchases until the rate stabilizes. In our experience, we relied on the Syrian pound in our commercial dealings, especially since fuel supplies and raw materials became available, allowing competition among traders, which leads to lower prices. However, I believe that electricity prices will affect product pricing and sales.”
Waiting for stability
Raed Totenji, a trader in Damascus, affirmed that any stability in the value of the pound would lead to market stability, allowing traders to calculate the capital needed for goods. In contrast, volatility leads to losses for traders and unfair pricing for consumers. Purchasing activity is also clearly affected, as both traders and residents refrain from buying and selling due to the absence of a clear price.
He added in his interview with North Press, “The circulation of an illusory exchange rate among people is part of the reason for instability. From morning to evening, the rate rises and falls repeatedly. Ultimately, Syrians need a fixed rate so the market does not become stagnant.”
Market realities indicate that instability in the value of the pound has caused economic contraction and widened losses for both traders and citizens. This affects buying and selling dynamics, prompting traders to adjust their strategies regarding goods and inventory, while consumers rearrange their spending priorities.
These behavioral adjustments represent a natural response to an environment marked by monetary instability, while hopes for stability and recovery of the pound remain suspended, awaiting fundamental solutions to a long-standing crisis.
Reporting by Sawsan Taha