The Syrian pound has continued to fluctuate against the US dollar, a trend that has become clear since the beginning of May, as the local currency kept falling against the dollar, with one dollar reaching 13,900 old Syrian pounds.
Despite the pound’s fluctuations against the dollar on the black market, the Central Bank of Syria kept the exchange rate at 11,250 old Syrian pounds for buying and 11,350 for selling, and 112.50 new Syrian pounds per dollar for buying and 113.50 for selling.
Reasons Behind the Pound’s Instability
Economic adviser at the Ministry of Economy and Industry Osama Kadi told Enab Baladi that one of the most important factors behind the decline of the Syrian pound against the dollar is inflation in the prices of many imported goods.
Kadi cited the example of urea fertilizer prices rising by 60%, a trend seen across fertilizer prices in general, which rose globally by more than 30%.
He added that importing materials such as energy and fodder contributed to increasing domestic demand for foreign currency, which pushed the dollar’s exchange value higher against the Syrian pound.
The reasons did not stop there, according to Kadi, who pointed to other problems, including the incomplete banking infrastructure, which delayed the currency replacement process, as well as the absence of decisions canceling previous measures that froze balances deposited before May 2025. He also cited the lack of communication between banks for electronic payment, which undermined confidence in banks and delayed control over the money supply.
Kadi explained that Syrian banks have not yet been connected to the SWIFT system, delaying the entry of investments despite the presence of non-Syrian banks in Syria that are easier to deal with.
He noted some problems with transfers through the SWIFT system, which is still awaiting facilitation for foreign currency transfer operations by companies before they can enter the Syrian market. This has delayed the possibility of bringing in quantities of foreign currency that the country needs.
For his part, Mohammed Al-Hallaq, vice president of the Economic Sciences Association, said Syria’s exchange rate is affected by several factors that are not limited to the economy. The economic factors are reflected in a lower supply of foreign currency, caused by fewer transfers from abroad due to the war between Iran and the United States.
The increase in imports, and the payment of customs duties and advance income tax in dollars, also affected the exchange rate in one way or another, Al-Hallaq told Enab Baladi.
Al-Hallaq added that the government faces a major challenge in dismantling the structure left behind by the former regime, with its many distortions, starting with low salaries, theft from the treasury, social insurance funds, and platform funds, and extending to many issues related to the actual revenues of former regime governments.
The major challenge before the government, according to Al-Hallaq, centers on its ability to build the country’s internal financial, economic, and social structure, stressing the need for partnership with the business sector in any decision.
Government Policy Weakens Confidence in the Pound
Financial expert Khaldoun Al-Tabbaa said the monetary policy adopted by the Syrian government, including draining the national currency in an attempt to preserve it, has affected and continues to affect citizens’ confidence in the pound, which is tied to many issues related to financial decisions.
The recent Central Bank decision limiting the delivery of remittances to Syrian pounds at the exchange rate set by the bank, with a 15% profit margin, weakened citizens’ confidence in the pound, according to Al-Tabbaa, because the rate will be lower than the black market rate.
Economist Ammar al-Youssef described the logic of monetary management that seeks to stabilize the dollar exchange rate by locking up liquidity as destructive to the national economy, saying it restrains economic activity and creates a major obstacle to national economic recovery.
Economist Ghazi Al Mahayni said the Central Bank of Syria has not had any strategic attempts or clear plans to maintain exchange rate stability, because what was introduced under the former Central Bank governor consisted mostly of emergency, stopgap, and improvised decisions that do not address the root of the problem, but only hide the symptom.
External Factors Affect the Exchange Rate
The reasons for the Syrian pound’s decline against the US dollar did not stop at internal factors. Economist Ghazi Al Mahayni told Enab Baladi that Syria, like others, was affected by the war between Iran and the United States in the region, through a decline in Syrian expatriate remittances from the Gulf to Syria, in addition to the suspension of air traffic and travel to and from Syria, which ultimately reduced the supply of dollars in the Syrian market.
He noted that these factors coincided with a 60% increase in the cost of imported oil, which raised government spending and created growing demand for the dollar alongside declining demand for the Syrian pound.
Economist Ziad Arabsh attributed the decline in the dollar exchange rate against the pound to the contraction of remittance flows following tensions in the Arabian Sea and rising demand for the dollar because of lack of confidence in the pound, in addition to the continued public budget deficit and the scarcity of real foreign reserves.
Arabsh added other reasons, including the black market’s dominance in determining the actual rate and regional geopolitical disruptions, which added further pressure on demand for the dollar as a safe currency.
The Exchange Rate Between Real and Illusory
Financial adviser Khaldoun Al-Tabbaa described the dollar’s exchange rate against the pound as illusory, suggesting that the real rate is between 200 and 230 new Syrian pounds, equivalent to 20,000 old Syrian pounds.
Economist Ammar al-Youssef agreed with Al-Tabbaa in considering the current rate of the Syrian pound against the dollar illusory, attributing this to the Central Bank’s locking up of liquidity.
The change in the largest denomination between the old and new currency, from 5,000 to 500 pounds, also doubled the value of the currency, creating a certain price reflection on the exchange rate.
Economist Ghazi Al Mahayni expected the real price of the dollar to be higher than the current one, noting the difficulty of determining its real price amid the absence and scarcity of information issued by the Central Bank.
Economist Ziad Arabsh said the current rate is below its real value, explaining that the real rate, according to estimates by experts and economic advisers, ranges between 17,000 and 20,000 old Syrian pounds per dollar.
Mohammed Al-Hallaq, vice president of the Economic Sciences Association, rejected describing the current exchange rate as illusory, given that buying and selling are possible at the offered rate. He explained that the current rate does not reflect the real value of the Syrian pound, and therefore there is a difference between the two expressions.
What Is Needed?
Economic adviser Osama Kadi said what is required from the new administration of the Central Bank is to move quickly to complete banking infrastructure, urge investors to bring in as much foreign currency as possible and start their investments, encourage agriculture and industry, and move the wheel of economic growth to increase exports.
In conclusion, he pointed to the need to accelerate electronic payment, complete currency replacement, and roll out the necessary number of ATMs.
For his part, financial adviser and expert Khaldoun Al-Tabbaa stressed the importance of activating electronic wallets for payment, saying they would have a positive effect and help significantly balance the exchange rate by building confidence and strengthening the role of the Central Bank, provided they are activated properly.
Al-Tabbaa explained that strengthening the pound is achieved by strengthening local production in both the agricultural and industrial sectors, which requires a clear government economic reform plan that enhances the role of these sectors to increase domestic output and help the exchange rate recover.
Economist Ziad Arabsh said the recommended controls lie in unifying the exchange market by gradually closing the time gap between the official rate and the black market rate.
He also called for banning foreign currency transactions except through banks and officially licensed companies, strengthening foreign currency supply by encouraging external remittances, and stimulating exports of national products.
He added that the measures should include attracting direct foreign investment, curbing currency printing to finance the deficit, and ensuring transparency in data by announcing the real foreign reserves and unified exchange rates.
Kadi said that joining the SWIFT system and bringing large amounts of foreign currency into the country could lead to an improvement in the pound’s exchange rate.
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