Unlock the digestive of free editor
Roula Khalaf, the FT editor, chooses her favorite stories in this weekly newsletter.
The Central Bank of Syria has flown to fresh banknotes from Russia to facilitate a severe lack of money that has left its economy struggling to function.
The Central Bank said on Friday that the Syrian pounds had arrived from Russia to Syria through Damascus International Airport “but did not confirm the amount of coin. The money was badly needed as bankers and businesses said the absence was severely obstructing business.
Flight underlines an area of continued Russia dependence on the new Syrian government, which faces difficulties in buying banknotes from the West due to sanctions on the state, forcing it to negotiate surrender from a place that was ally with the inverted regime of Bashar al-Asad.
A textile retail manufacturer and salesman who asked not to be named, said the absence had reached the point where “people have stopped putting money in the bank because they worry they could not remove them.”
The rumors had circulated on Syrian social media about the arrival of eagerly awaited notes, but the Central Bank said on Friday that “the figures circulating for the size and the amounts of money” were “completely incorrect”, without confirming details.
Foreign Minister Asaad Al-Shaibani told The Financial Times last month that, under the government of Assad, the Central Bank would order the remittances of the oppressed currency from Russia when necessary. Goznak, the state -run Russian printer, supplies the notes, which must be repeatedly replaced.
Western Bannotes printers would not be able to immediately raise supplies and would not hesitate to secure money in light of continuous sanctions against the country, according to banknote experts, leaving the new government to rely on Goznak for now for now.
It remains unclear whether the new regime is seeking to get some Syrian banknotes from circulation. One of the two most used notes, 2,000 Syrian pound bills, sports the image of Assad, who is now living in Russia.
The Central Bank removed a temporary withdrawal limit at the end of last month, but business and retail clients that require money from banks are still often removed.
Some private banks have received up to $ 600 million (about $ 65,000 in the widely used black market) daily from the Central Bank in recent weeks, told the two Financial Bankers Times, speaking on condition of anonymity.
The amount is nowhere near to keep businesses at sea, businessmen say. Manufacturers and traders cannot access most of their bank deposits to pay suppliers and salaries.
“Traders have paid employees from their reserves (money), and this has been working for two months, but how long can they last?” said a banker.
Transfers between banks are still available, with businessmen who occasionally use this method to buy and sell goods – a trader of a system compared to “Pseudo Barter”.
The impact of the lack of cash is exacerbated by the lack of information on how many Syrian pounds are in circulation.
Unlike most central banks, Syria does not produce weekly statements with details on the amount of banknotes in circulation. Its website is inaccessible, adding the opacitship surrounding its operations.
Kanks are often destroyed and taken from circulation on a daily basis due to clothing and tears, with central banks worldwide, constantly recharging their shares.
The two -decade private banking system of Syria was mainly used for commercial purposes, with citizens tending to keep their money.
The tendency of people to avoid the banking system had increased in the years that led to the fall of Assad when the regime began to seek financial information from the small number of Syria’s private banks in an effort to apply AD HOC taxes for big winners.
Syria’s economy had already been shattered by 13 years of civil war, widespread corruption under the Assad regime and Western sanctions, including its banking sector.
Businesses say, despite the widespread euphoria that welcomed Assad’s overthrow, their sales have fallen. Some are also under pressure after removing export restrictions, which means that they now have to sell existing shares with loss.
“People are not spending because they don’t know what will happen,” the textile businessman said. “Companies are not spending because there is no cash income, and the main advantage is to pay employees.”
Western governments, meanwhile, have held the majority of sanctions on Syria and its banking sector in the country. Some officials, including the EU, have designed road maps to facilitate phase measures.
“There are a number of signs of confusion and lack of clarity,” said Jihad Yazigi, News Outlet Syria Report editor. “The economy is a big, big issue. . . An essential test to the new authorities in Damascus will be the provision of (a) sustainable supply of. . . Energy and bread and, in general, ensuring that the economy resumes. “
