Syria’s central bank devalued the Syrian pound on Wednesday giving in to weeks of depreciation on the black market as new US sanctions took effect.
The central bank raised the official exchange rate from 704 to 1,256 Syrian pounds to the dollar, in a statement published on its social media pages.
The previous rate had been in force since March.
Earlier this month, the war-torn country’s currency hit a record low on the black market of around 3,000 pounds to the dollar, sparking rare protests, before appreciating slightly after an apparent injection of dollars.
On Wednesday, the rate on the parallel market stood at around 2,600 to 2,800 pounds to the dollar, traders told AFP.
The devaluation comes as the United States prepares to implement new sanctions this week under the Caesar Act, targeting foreigners doing business with the Damascus government, as well as reconstruction of the country.
Zaki Mehchy, a senior consulting fellow at the London-based Chatham House think tank, said the central bank was trying to minimise the gap between the official and black market rates.
“It is trying to encourage people to use the official channel instead of the black market,” he said.
But the pound would probably continue its slide, punctuated by short periods of appreciation, he said.
Syria’s economy has been battered by nine years of war, and is now reeling from the knock-on effects of a financial crisis in neighbouring Lebanon that has stemmed the flow of dollars into government-held areas.
Analysts have said the recent lows on the black market are likely due to worries ahead of the introduction of new US sanctions, and the sudden fall from grace of tycoon and cousin of the president, Rami Makhlouf, which has set other top businessmen on edge.
The Damascus government has long blamed the country’s economic crisis on international sanctions.
Last week, President Bashar al-Assad sacked his prime minister of four years after criticism of the government’s handling of the crisis.
Before the conflict, the exchange rate stood at 47 Syrian pounds to the dollar.
Turkish lira becomes unofficial currency in Syria as economy sinksIn Turkish-controlled parts of northern Syria, people have started to use the Turkish lira, rather than the local Syrian currency as the economy and ... Features
New sanctions on Syria under Caesar Act might help save LebanonIn Lebanon, there is very little debate today on the streets beyond the exchange rate and the value of the local currency which is spiraling downward, ... Middle East
Iranian sentenced to death for spying, arrested by Hezbollah in Syria, handed to IranAn Iranian sentenced to death on charges of spying for the CIA and the Mossad, was arrested and handed over to Iran by the Lebanese Hezbollah in Syria ... Middle East
Jordanian and Yemeni al-Qaeda commanders killed in drone strike in Syria: ReportA drone strike in northwestern Syria on Sunday killed two senior commanders with an al-Qaeda-linked group, opposition activists said.The Britain-based ... Middle East