Syria Revalues Pound by 99% to Boost Economy

Syria is set to revalue its currency, the Syrian pound, by removing two zeros from its denomination. This move is aimed at restoring public confidence in the severely devalued currency and boosting its purchasing power. According to informed sources and documents reviewed, the new banknotes will have their face values reduced by a factor of 100. This decision comes as part of a broader effort to stabilize the Syrian economy, which has been severely impacted by years of conflict and economic sanctions.

The revaluation of the Syrian pound is a significant step in the country's economic reform efforts. By removing two zeros from the currency's denomination, the government hopes to make transactions more manageable and to reduce the psychological impact of high inflation on the population. This move is expected to simplify pricing and make it easier for businesses and consumers to conduct daily transactions. Currently, the Syrian pound has lost over 99% of its value since the start of the war in 2011, with the exchange rate now standing at approximately 10,000 Syrian pounds to 1 US dollar, compared to 50 Syrian pounds to 1 US dollar before the conflict. The drastic devaluation has made daily transactions and fund transfers increasingly difficult, with households often using black plastic bags filled with at least half a kilogram of 5000 Syrian pound notes to pay for weekly grocery expenses.

The decision to revalue the currency is also seen as a way to combat the widespread use of foreign currencies, particularly the US dollar, in Syria. The devaluation of the Syrian pound has led to a significant increase in the use of foreign currencies for transactions, which has further weakened the local currency. By revaluing the Syrian pound, the government aims to encourage the use of the local currency and to reduce reliance on foreign currencies. The new leadership in Syria has promised to create a free market economy and has lifted restrictions on the use of foreign currencies to ease the flow of funds. However, there are concerns about potential liquidity issues with the Syrian pound in a country with limited digital payment infrastructure.

The revaluation of the Syrian pound is part of a broader economic reform package that includes measures to control inflation, stabilize the exchange rate, and promote economic growth. The government has been working on these reforms for several years, and the revaluation of the currency is seen as a key step in this process. The success of these reforms will depend on a range of factors, including the government's ability to implement them effectively and the response of the international community. The Central Bank of Syria has notified private banks of its plan to issue new currency by removing two zeros, and has instructed lending institutions to be ready for the new currency's release by mid-October. Banks have been asked to submit detailed reports on their infrastructure, including the number of cameras, coin counters, and storage capacity, and to conduct tests to ensure that automated systems can handle the new currency. There will be a 12-month coexistence period during which both the new and old currencies will circulate simultaneously, until December 8, 2026.

One of the driving forces behind the planned currency reform is the concern that an estimated 40 trillion Syrian pounds are circulating outside the formal financial system. Issuing new banknotes will enable the government to better monitor the cash in circulation. This move also holds symbolic significance, marking a clear break from the more than fifty years of rule under the Assad family. The faces of Bashar al-Assad and his father Hafez al-Assad have been featured on the 2000 and 1000 Syrian pound notes, respectively. Officials plan to launch a publicity campaign in the weeks leading up to the official release of the new banknotes on December 8, which marks the one-year anniversary of Assad's ousting. However, there are concerns about potential confusion among consumers, particularly the elderly, and the lack of a clear regulatory framework or comprehensive national implementation plan, given the disparities in territorial control within the country. Some experts suggest that Syria could achieve similar goals by issuing higher denominations of the same currency, such as 20,000 or 50,000 Syrian pound notes, while avoiding the substantial costs associated with a full currency reform.