A sudden rise in the value of the Syrian pound in the markets of Kurdistan.. Chaos or the beginning of stability?
A sudden rise in the value of the Syrian pound in the markets of Kurdistan.. Chaos or the beginning of stability?
2024-12-15 00:59
Shafaq News/ The currency markets in the Kurdistan Region are witnessing remarkable changes with the “sudden” rise in the value of the Syrian pound against the Iraqi dinar, which sparked wide discussions among experts and traders about its causes and potential effects on the local market.
After the fall of Bashar al-Assad’s regime, the Syrian pound continues its recovery against other currencies, especially the US dollar, which declined by 18 to 20% during the past few days.
Unscientific rise
Ismail Ibrahim, a currency trader in the dollar market in Sulaymaniyah, describes the current situation as “chaotic,” noting that the recent rise in the value of the Syrian pound has no scientific basis.
He told Shafaq News Agency, “This increase is due to the pumping of the Syrian pound by those who owned it in the past, and I do not think that the return of Syrian refugees to their areas has a significant impact on this increase.”
High demand and low supply behind the rise
Economist Ayman Hisham provides an economic analysis of this increase, explaining that the main reason is due to the shortage of available supply of the Syrian pound in the region’s markets.
He added to Shafaq News Agency, “There is a great demand from citizens to buy the Syrian pound, which led to a sudden increase in its value,” indicating that “before the Syrian regime regained control over some areas, the price of one million Syrian pounds was only about 100 thousand Iraqi dinars, but now it has reached 600 thousand dinars, and has currently stabilized at 550 thousand dinars as a result of the increasing demand.”
Hisham also reviewed an economic background that confirms the significant deterioration that the Syrian pound has suffered over the past decade, as it lost its value against the US dollar by 270 times between 2011 and 2023.
He also pointed to reports from the World Bank, the United Nations and the International Monetary Fund that showed Syria’s GDP had shrunk by more than 85% since 2011, reaching just $9 billion by 2023, with an additional 1.5% contraction expected this year.
The interconnectedness of economy and politics in Syria
As for Jabbar Kuran, the spokesman for the currency market in Sulaymaniyah, he focused on the close relationship between the political situation in Syria and the stability of the currency. He told Shafak News Agency, “The major political transformations that Syria may witness in the future, such as the formation of a new government or the fall of the current regime, may lead to a gradual improvement in the value of the currency, as happened in Iraq after the fall of Saddam Hussein’s regime.”
“If the political situation stabilizes and a government that includes all parties is formed, the Syrian economy may witness a gradual improvement, which will be positively reflected in the value of the Syrian currency. However, the current situation is still too early for the lira to stabilize,” Kuran added.
Kuran ruled out that the fluctuations of the Syrian pound would have a direct impact on other currencies, given its nature as a local currency, but he pointed out the possibility of its indirect impact on the prices of agricultural goods imported from Syria due to trade relations between the two countries.
sudden rise background
Hawri Fakher, an economic journalist, told Shafaq News Agency that the Syrian pound has been affected by complex political and economic factors over the past years. The ongoing war since 2011 has caused a major collapse in its value. While the exchange rate of the Syrian pound in the Iraqi markets was very low, recent political events, such as the Syrian regime regaining control of some areas, have led to an increase in demand for it in the Sulaymaniyah markets, which has unexpectedly raised its value.
Future expectations
Fakher says that despite the current rise in the value of the Syrian pound, he agrees with those who say that it is a temporary and unstable rise.
He pointed out that the recovery of the Syrian economy and the stability of the currency are linked to the improvement of the political situation in the country and the formation of a new government that ends the current crisis.
shafaq.com
