Syrian regime has had enough --with currency flight

Published September 1st, 2013 - 09:45 GMT
The bank has said it is providing financial institutions with U.S. dollars at the rate of 175 pounds since last month.
The bank has said it is providing financial institutions with U.S. dollars at the rate of 175 pounds since last month.

The Syrian Central Bank warned that foreign currency traffickers could face up to 15 years in jail without trial, as the pound seemed to recover slightly on the black market, but was still much weaker than before Western powers weighed military options. “Penalties will include temporary detention of up to 15 years for those who move foreign currencies outside the country, whether through authorized money transfer companies or through border crossings,” Syrian Central Bank Governor Adib Mayaleh said in a statement published Thursday by the official Syrian news agency SANA.

“[Penalties will also include] a fine equivalent to three times the amount of the transfer and not below 15 million Syrian pounds,” Mayaleh was quoted by the agency as saying.

The pound ranged between 230 and 260 to the dollar on the black market Friday, according to several Beirut-based money changers, in an apparent improvement from the 250 to 275 reported by Bloomberg News Thursday.

The British Parliament voted against a military intervention in Syria Thursday in a move that suggested that prospects of a U.S.-led military intervention could recede.

But the black market rates are still much higher than before the news that a military strike was impending. The Syrian pound had remained steady at around 200 pounds in the black market for most of the past month, after reaching rates as high as 300 pounds to the greenback early in July.

Syria’s central bank has raised the official exchange rate of the Syrian pound to 128 to the dollar Thursday, with some analysts describing the move as aimed to gradually close the gap between the official and black market rates.

The bank has said it is providing financial institutions with U.S. dollars at the rate of 175 pounds since last month.

“The central bank is still financing imports and selling dollars to banks and currency changers at the rate of 175 Syrian pounds [to the dollar],” Mayaleh was quoted as telling SANA Thursday.

He reiterated that any traders selling, pricing or paying for goods and services in foreign currencies or precious metals would face jail up to three years, in addition to confiscation of the money and goods involved.

“The penalty will go up to 10 years in prison and hard labor if the amount of foreign currency dealing is above $5,000,” he added.

Head of the Lebanese Money Changers Association Ramez Mkataf suggested that the majority of Lebanese money changers had stopped dealing with the Syrian currency.

He told The Daily Star that Syria’s central bank had last month filed an official request through Lebanese regulatory authorities for money changers to halt all dealings with the Syrian pound.

“In any case, most money changers have not been dealing with the Syrian pound that much because of the losses resulting from its continuous decline,” Mkataf said, when asked if money changers were complying with the Syrian request.

Syrian authorities closed one more currency dealer after several arrests and closures were reported earlier by SANA and the state-run Syria TV.

“Fouad Exchange Co. has been closed down by authorities after the company was complicit in taking advantage of displaced citizens ... [by] using their identity cards [as guarantees] to acquire sums of foreign currency,” SANA reported Friday without elaborating.



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