Syria to revalue currency, dropping two zeros in bid for stability
Baku, August 23, AZERTAC
Syria will issue new banknotes, removing two zeros from its currency in an attempt to restore public confidence in the severely devalued pound, according to seven sources familiar with the matter and documents reviewed by Reuters.
The step is intended to strengthen the Syrian pound after its purchasing power collapsed to record lows following a 14-year conflict that ended with President Bashar al-Assad's ouster in December.
Confirming the move, Syria's Central Bank Governor Abdelkader Husrieh said on Friday the revaluation was a strategic pillar of fiscal and monetary reforms.
"We have formed committees with public and private banks and experts from the central bank to determine the requirements for changes" in the currency, he told Saudi state-owned broadcaster Al Arabiya, describing the new currency as a "necessity".
He said a time frame to introduce the new currency was still "under review".
The Syrian pound has lost more than 99% of its value since war erupted in 2011, with the exchange rate now at around 10,000 pounds to the U.S. dollar, compared to 50 before the war.
The sharp depreciation has made daily transactions and money transfers increasingly difficult.
Families usually pay for weekly grocery runs from black plastic bags holding at least half a kilogram of 5,000-pound notes, currently the highest denomination.
In an attempt to ease transactions and improve monetary stability, Syria's central bank informed private banks in mid-August that it intended to issue new currency by "removing zeros", according to a document seen by Reuters.
Reuters spoke to five commercial bankers, one central bank source and one Syrian economic official who said the central bank had informed them that two zeros would be removed. They spoke on condition of anonymity to discuss a decision that had not yet been made public.
Meetings on the currency overhaul have been chaired by Central Bank Deputy Governor Mukhlis al-Nazer, according to the commercial bankers who attended the meetings.
Nazer did not reply to a request for comment. Amal al-Masri, the head of the central bank's Banking Supervision Department, declined to comment. The finance ministry did not respond to a request for comment.
It was not immediately clear whether the revaluation of the pound would need legislative approval. Syria is set to hold its first elections to set up a new legislative assembly in September.
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