The recent sharp decline in the U.S. dollar exchange rate against the Syrian pound is “illusory” and likely to be followed by a significant rebound, according to Syrian economist George Khazzam.
In a statement to Al-Mashhad, Khazzam explained that the temporary drop was largely driven by speculative behavior in response to optimistic news headlines. “Those who anticipated a decline in the dollar’s value sold it at around 11,000 SYP,” he said. “But the same individuals are now buying it back at 9,000 SYP—often ending up with more dollars than they started with.” He gave an example: a trader who sold $10,000 at the high rate is now repurchasing $12,000 at the lower rate, generating both profit and market distortion.
Artificial Drop, Real Demand
Khazzam emphasized that no sustainable increase in the supply of U.S. dollars has occurred to justify the currency’s rapid fall. On the contrary, he argues, the temporary surplus in dollars has been absorbed by market players taking advantage of the dip. As a result, demand is rising again—now at levels higher than the initial supply spike, which triggered the illusion of stability in the first place.
This mismatch, Khazzam warns, will almost inevitably lead to a rebound in the dollar’s exchange rate, possibly even surpassing the pre-drop figures.
Political News Drives Market Psychology
The economist also highlighted the psychological sensitivity of the Syrian market to political developments. “Positive political news often triggers an expectation that the dollar will fall, leading to mass selling,” he said. “But the reverse is also true: any political instability or bad news immediately reignites demand for dollars, anticipating currency depreciation.”
The Illusion of Recovery Without Production
Khazzam stressed that any decline in the dollar’s value that is not rooted in structural economic improvements—such as rising exports, reduced imports, and lower unemployment—is inherently unstable. “Unless backed by real growth and productivity, any drop in the exchange rate is artificial and will be followed by a more severe correction,” he cautioned.
While the temporary appreciation of the Syrian pound has sparked hope among consumers and traders, experts like George Khazzam urge caution. In his view, the market is still vulnerable to shocks, and without a fundamental shift in Syria’s economic output and trade balance, the recent dip in the dollar is likely to prove fleeting—and a more painful surge could be on the horizon.
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.
