Syria’s Central Bank issues 5000 SYP note, halting money exchanges.
DAMASCUS, Syria (North Press) – The Central Bank of Syria announced on Sunday the launch of new banknotes in the 5,000 Syrian pound (SYP) denomination and the start of its circulation in the market.
The Central Bank indicated that the introduction of the new note was based on studies it carried out in previous years, and that it had put in place a plan to ensure the needs of cash circulation in all denominations.
Syrian currency is in a continual freefall against foreign currencies, and the value of one US dollar today is approximately 3,000 SYP.
In response to the introduction of the new notes, most of the money exchange shops in the northeastern Syrian city of Hasakah stopped trading and exchanging the US dollar. The exchange market in the shops in Hasakah froze at the exchange rate of 2900 SYP to one dollar.
Two years ago, the Central Bank printed 5,000 SYP notes to meet the expectation of the circulation needs of banknotes. According to the Bank, the new notes have more security features that make them difficult to counterfeit and are easily distinguishable from fakes.
The notes are printed with color-changing ink with dynamic ripple effects vertically in gold on a light green background, while the reverse side of the note is a microscopic perforation of the number 5000 that appears when viewed against the light.
Several years ago, the Central Bank printed new 50, 100, 200, 500, and 1000 pound banknotes and put them into circulation. Notes were printed in 2015 and put into circulation in the second half of 2017.
Syrian academic Muslim Talas previously told North Press that government issuance of new currency is usually done for three reasons: “either to replace old currency, to increase monetary mass in the market, or finance the deficit in the state’s budget.”
“In the Syrian case, the first two reasons lead to a further decline in the value of the Syrian pound,” he added.
Ayman Kalash, an economist and exchange shop owner in Hasakah, told North Press that the markets halted trading after the new denomination was officially introduced, adding that the Syrian pound will likely witness even further deterioration. He expects that the exchange rate will reach as much as 3500 SYP to the dollar.
The exchange shops will resume work tomorrow after the consequences of the new denomination’s circulation become clear, according to Kalash.