Syrian Pound Plunges to 5,000 Livres Per Dollar as Food Prices Soar

The Syrian pound plunged on the parallel market, hitting a historic low of 5000 livres for one dollar, according to exchange-rate monitoring sites cited by Ici Beyrouth, in a country ravaged by war and an unprecedented economic crisis.

“The Syrian pound's exchange rate remained near 13,000 pounds per US dollar in July, after a period of sharp volatility in June, when it reached 14,500 pounds per dollar in mid-month”

Al-Jazeera Net

Ici Beyrouth reported that on the parallel market the Syrian currency had since lost nearly 99% of its value, while the official exchange rate has been around 3 015 livres for one dollar since September.

Al-Jazeera Net

The same report said the war in Syria has made about 500 000 deaths, devastated the country’s infrastructure, and displaced millions of people.

It also linked the currency’s collapse to a historic rise in food prices, saying that the World Food Programme reported prices multiplied by 33 in ten years and that 60% of the population is now in food insecurity.

Ici Beyrouth added that a dollar had been worth 47 livres before the conflict began in 2011, and that the economy is suffering from Western sanctions and the effects of the financial crisis in Lebanon, where the banking system long served as a base for dollar supply.

In Damascus, SANA said the new Syrian currency was launched today at an official ceremony at the Damascus Palace of Conventions in the presence of President of the Syrian Arab Republic Ahmad al-Charaa and his wife Mrs. Latifa al-Droubi.

SANA reported that President al-Charaa and the Governor of the Central Bank of Syria Abdelkader Al-Husriyah unveiled the new currency, and that al-Charaa said the reform is "a symbol of the end of a bygone era" and the beginning of a new era the Syrian people and the peoples of the region hope for in a modern Syria.

CNN al-Iqtisadiyya

SANA also quoted al-Charaa saying that the issuance of the currency, with the removal of two zeros from the old currency and its replacement by the new one, does not mean an improvement in the economy but rather a simplification of monetary transactions.

The report said al-Charaa stressed that the transition phase is sensitive and that the most important factor is to avoid panic among the population so people do not rush to exchange old currencies for the new.

SANA further stated that all those who hold the old currency will be able to replace it with the new one, and that the Central Bank said the process would unfold according to a precise timetable.

Al-Jazeera Net said the Syrian pound’s exchange rate remained near 13,000 pounds per US dollar in July after sharp volatility in June when it reached 14,500 pounds per dollar in mid-month.

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Commerce du levant

The outlet quoted academic economist Dr. Ziad Ayub Arbash saying the scene "does not reflect a uniform improvement," but reveals a widening gap between official and parallel prices.

Al-Jazeera Net attributed part of the parallel-market strengthening to the pricing of oil derivatives in Syrian pounds exclusively at all stations, which created high demand for the national currency and forced many to sell dollars for daily living needs.

The same article said economist Mulham Al-Jazmati warned against treating the recent improvement as an indicator of economic recovery, saying it is linked to temporary monetary and administrative measures such as replacing the old currency with the new and tightening use of the new currency.

Al-Jazeera Net concluded with Al-Jazmati’s view that stabilization requires more than an announced decision, including foreign currency reserves sufficient to defend a given exchange rate and the ability to prevent a return of the black market.