Syria incapable of stopping currency’s devaluation – Economist
QAMISHLI, Syria (North Press) – On Thursday, an economist stated that the Syrian government is incapable of stopping the Syrian pound’s continuous devaluation. The economist believes that the government lacks cash solutions and hard currency to support the pound’s value against its historical decline, which explains its reliance on black market trading.
Muslem Talas, a Syrian economist in the German Institute for Development and Sustainability (IDOS), told North Press that the Central Bank of Syria has depleted its resources and reserves in trying to uphold the value of the Syrian currency. He explained that the bank is now facilitating the transfer and conversion of hard currency to prevent further depreciation.
He attributed this to the Syrian economy shrinking by roughly 70 percent during the years of war and the Gross Domestic Product (GDP) decreasing from around 60 billion dollars prior to the war to approximately 20 billion dollars at present.
Talas emphasized that the Central Bank requires a reserve of hard currencies to prevent the collapse of the Syrian currency, but it currently lacks such reserves. He also mentioned that the bank has already lost a significant portion of its reserves in earlier attempts to stop the pound’s continuous devaluation.
Western sanctions have worsened the situation, and the government’s financial resources are inadequate to fund the deficit, resulting in the printing of a new currency and its circulation in the market, which has further exacerbated the situation, he added.
The economist anticipated that the Syrian Pound would drop more in the coming days.
He also stated that in the event of peace agreements in Syria and the influx of investments and economic companies, it may be possible to stabilize the Syrian pound at a certain level, but he ruled out its improvement to the levels it was at before.
Syria has been experiencing a severe economic crisis for several years, with one of the main drivers being high inflation rates. The inflation rate in Syria has skyrocketed due to a combination of factors, including the ongoing civil war, economic sanctions, and a shortage of essential goods.
The high inflation rate in Syria has had a devastating impact on the country’s population, with many struggling to afford basic necessities such as food, housing, and healthcare. The ongoing conflict in Syria, coupled with the economic crisis, has led to a humanitarian catastrophe, with millions of Syrians displaced and in need of aid.