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The lives of Syrians in the areas controlled by the Bashar al-Assad regime are now calculated in dollars. Despite its transactions in the Syrian pound, the price rate and its scale are linked to the recent exchange rate in the foreign exchange market. The price changes every hour and sometimes every ten minutes, until every 3,600 Syrian pounds is worth one US dollar.
According to the daily exchange market bulletin, on Wednesday the Syrian pound plummeted to record levels, and economists expect it to reach the 4,000-pound barrier against the dollar in the coming days, especially given the lack of alternatives to which the Assad’s government may turn to stop the ongoing bleeding.
Al-Hurra surveyed, by phone, the opinions of citizens living in areas controlled by the Syrian regime. Abdel Salam, a young man from Homs, said that the price of food doubled by 40 percent last week, in a “crazy” rise that coincided with the collapse of the exchange rate of the Syrian pound from 3000 thousand pounds to one dollar for 3600..
“May God help the poor.”
Abdul Salam, who requested that his real name not be used for security reasons, added: “The price of the night is erased with the day. For example, the price of a liter of sunflower oil rose in two days by 500 pounds to get to 6500 pounds, and next to him the sugar flew to bring the price of a bag (50 kilograms) to the point of 100,000 Syrian pounds. ”
“Our lives are counted in dollars. And God helps the poor.” And he continues: “The salary of the Syrian employee in the institutions of the regime is now equal to the price of a can of mate, a small box of tea and a plate of eggs only.”
The price of a packet of mate in the capital Damascus is 3,500 Syrian pounds, while 25 bags of tea cost 1,500 pounds, while the price of a plate of eggs has reached 7,000 Syrian pounds.
The situation is not much different in the rest of the Syrian provinces under the control of the Assad regime. In Damascus, for example, there is something that “increases the chop”, and in addition to the incredibly high prices, Syrians are forced to this day, to line up at bakeries to get a wad of bread.
Aref is a young man displaced from the Hama camp, who lives with his family in Damascus, and in recent years he was the only one in his family who works to ensure the necessities of life (in the Conserva Factory), but the rest of his family are now forced to work to survive, he said.
Aref added to Al-Hurra’s website: “I receive 50,000 Syrian pounds as a monthly salary, which is equivalent to $ 13.8. It is not enough to buy sugar and tea every month.”
‘Runaway inflation’
Faced with the collapse of the Syrian currency and the insane doubling of food prices, there are no solutions on the horizon from the Assad regime government, which insists on a security policy whose ultimate consequences were directed by the Anti-Terror Authority of the Central Bank of Syria to arrest dozens of merchants due to their transactions in dollars The US administration also tended to tighten security for remittance companies.
In a statement issued three days ago, the Central Bank said: “The Anti-Money Laundering and Terrorism Financing Authority and the judicial police have carried out many tasks in various governorates, specifically in the governorates of Damascus, Hama and Aleppo, which resulted in a group of companies and entities working to speculate on the lira. “Syria.”
The bank added: “Large amounts of funds in Syrian pounds and US dollars were confiscated, and the Central Bank of Syria continues with a multifaceted process of intervention that leads to the return of the exchange rate in the foreign exchange market to the previous equilibrium levels. . “
Economic expert Dr. Osama Al-Qadi says that monitoring the exchange rate of the Syrian pound against the dollar may be an appropriate guide, as it reflects a small case of inflation rates, which have exceeded fifty percent annually. since 2011.
Al-Kady added, speaking to Al-Hurra’s website: “Inflation reached almost 6,700 percent between 2011 and 2021, which is the number of hyperinflation that reached the Democratic Republic of the Congo in 1992 and lasted 12 months.”
The economist believes that “the persistence of inflation at a rate of 50 percent each year means that in 2025 the price of the Syrian pound will reach 14,500 pounds per dollar, and then inflation will reach between 2011 and 2025 at 29 thousand per cent. hundred!”
Four reasons behind the collapse
According to the United Nations World Food Program, food prices in Syria have increased by 249 percent, at a time when an estimated 9.3 million Syrians are food insecure.
The Syrian pound fell sharply during the conflict years, as the US dollar was equal to 48 Syrian pounds, while today it is equivalent to 1,256 pounds at the official price, and about 3,600 pounds at the parallel market price.
There are four reasons behind the current collapse of the Syrian pound exchange rate, according to the doctor of international economic relations, Abdel Moneim al-Halabi. The first is the failure of Syrian exports to secure sufficient “dollar resources” for the import bill, the weakness of the Central Bank’s ability to secure dollars at a good price for importers, as well as Iran’s failure to deliver on its promises of resume the two billionth line of credit.
There are other reasons for the additional stress that contributed to the last decline.
Speaking to Al-Hurra, Al-Halabi added: “The first is the statements of the Director of Assignment Affairs and Recruitment Exemptions of the Army of the Regime on the confiscation of the assets of those who did not perform military service, over 42 and others, which generated an increase in the demand for dollars to pay the allocation in cash. “
As for the second reason, it is “the central bank’s insistence on not adjusting the exchange rate of remittances, which leads to an increase in the demand for dollars to implement them.”
Al-Halabi explains: “The third reason is related to the increase in the number of people fleeing the regime areas, and these people pay the exorbitant costs of smuggling in dollars, and they usually work to secure it from the controlled areas. by the regime and pressuring networks outside these areas. “
“Institutional breakdown starts at 3,700”
From the point of view of the economic consultant, Younis al-Karim, if the government of the Assad regime tends to improve the exchange rate of the Syrian pound, in the next two months, “state institutions will face a total inability to provide any of the goods and services. “
Al-Karim told Al-Hurra: “The arrival of the Syrian pound at 3,700 against one dollar will reduce the ability of state institutions to continue providing their services. The point of collapse of state institutions and their deficit begins in the 3700 level, and any number exceeding that will result in a capacity reduction “
There is no specific factor behind the current collapse of the lira exchange rate, and al-Karim believes that the exchange rate is the mirror of the economy and reflects the economic and political reality of the country. He continues: “There is a saying that the currency is the constitution, the borders and the entire economy of any country.
Al-Karim points to four factors behind the collapse of the lira today, the first of which is the improvisation of the management of the economic and monetary record by the Assad government, since “the regime’s declarations remain improvised and not founded on the real reality, and officials still speak what they understand. “
The second factor is the absence of “unity” within the system. The economic consultant points out that “the regime has divided into three streams: the first is Asma al-Assad and has alliances with Iran, the second is the Russian stream, and the third is the Rami Makhlouf stream. The aforementioned conflict weakens the economy structure and economic unit of the regime “.
There is a third factor associated with the accident, which is the “moral factor”. According to al-Karim: “The issuance of the 5000 pound note negatively affected the exchange rate. People now feel that the Syrian regime no longer has the money, and now it is mandatory to switch to hard currency.”
On January 24, the Central Bank of Syria released a new five thousand lire bill, which is the largest so far, and announced at the time that “the right time has come, based on current economic variables, to introduce the new one. cash category, “which he posted two years ago.
The Central Bank explained that the introduction of the new category took place “based on the studies it had carried out in previous years and its development of a plan to ensure the cash circulation needs.”
