The Syrian pound has once again dropped, reaching approximately 7,500 per dollar, with predictions that it may breach the 8,000 thresholds in a matter of days. This can be attributed in part to the fact that the influx of expatriate remittances has not seen any significant improvement with the start of Ramadan.
According to confidential sources in Damascus who spoke with Al-Modon, the amount of foreign remittances received this month did not meet expectations, failing to increase at the typical rate during Ramadan. This has resulted in another drop in the price of the Syrian pound after experiencing a minor increase at the start of the holy month.
Despite this, the same sources have suggested that the amount of remittances is expected to double with the approach of Eid al-Fitr. However, they have not been able to confirm this due to the current emergency economic conditions in Europe, which serves as a place of asylum for many Syrians.
Last week, a money transfer company in Damascus predicted that foreign remittances would double during Ramadan. However, the actual situation on the ground turned out to be different.
Regarding the reasons for the decline in remittances, Musallam Talas, an economic researcher at the German Institute for Development and Sustainability, has pointed out that the decrease could be attributed to the prior surge in remittances that were received after the earthquake disaster.
“Normally, remittances increase during Ramadan, especially after the regime has raised the official remittance dollar rate. However, it appears that the aid provided by Syrian expatriates during the earthquake period has depleted these remittances, and it’s worth noting that Syrians usually deduct these amounts from their already limited income,” as explained by Musallam Talas to Al-Modon.
Additionally, economic researcher Younis al-Karim has pointed to the deteriorating living conditions of Syrian refugees in Europe and Turkey this year as a result of the war in Ukraine and the resulting global inflation.
Furthermore, he also highlighted the challenges faced in transferring funds to Syria due to the US and European sanctions. He added, “Expectations of the dollar reaching 8,000 Syrian pounds began when the Syrian regime increased the official remittance dollar rate to 7,000 Syrian pounds.”
Karim further explained, “During the previous period, the Syrian pound benefited from the aftermath of the earthquake and the inflow of foreign aid to Syria. However, with the passage of time, the amount of money coming in has started to decrease, inevitably leading to a continued decline in the value of the Syrian pound.” He also referred to rumours circulating about the movement of large amounts of dollars from Syria to Lebanon, which may also contribute to the devaluation of the Syrian pound.
Sources supportive of the regime have urged the Central Bank of Syria to increase the interest rate as an initial monetary solution and to offer incentives to industrialists and farmers to boost production. Additionally, they have suggested that the country should leverage expatriate remittances to prevent the Syrian pound from falling to a new low.
However, Karim argues that the primary issue is not the interest rate but the availability of foreign exchange. He also notes that the regime’s treasury may not have the financial capacity to provide facilities to industrialists and agriculturalists.
This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.