A sudden rise in the value of the Syrian pound in the markets of Kurdistan.. Chaos or the beginning of stability?
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.
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Frank26: “BECAUSE OF A NEW EXCHANGE RATE, NOT BECAUSE OF A PROGRAM RATE”………F26
Governor of the Central Bank of Iraq receives a delegation from the International Finance Corporation
His Excellency the Governor of the Central Bank of Iraq, Mr. Ali Mohsen Al-Alaq, received a delegation from the International Finance Corporation, which included the Director of the Financial Sector of the Corporation in the region, Mr. Yousef Habash, and Mr. Bilal Al-Zughair, the Resident Representative in Iraq, the Financial Investment Officer, and the Head of the Advisory Department.
During the meeting, they discussed strengthening bilateral relations between the Central Bank of Iraq and the International Finance Corporation, the importance of cooperation between local banks and correspondent banks with technical support from the Corporation, and the development of Islamic banks operating in Iraq, in addition to the banking reforms carried out by the Bank in cooperation with the relevant authorities, especially the restructuring of government banks, and the role of international companies operating in this field (Ernst & Young and Oliver Wyman).
His Excellency the Governor discussed the proposal to establish a leasing company with local and foreign contributions, which is one of the financial systems used to provide financing for projects and individuals without the need to directly purchase assets such as machinery and industrial equipment, vehicles, offices, and warehouses. This proposal supports emerging projects and small and medium-sized companies looking for easy and flexible financing.
The meeting discussed the importance of launching Riyada Bank next year, which will support projects with small and medium-sized loans, in line with the government’s vision to support graduates and entrepreneurs and develop labor markets.
Central Bank of Iraq
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Blinken: I was amazed when I arrived in Baghdad by the construction in Iraq and the vitality of the capital
US Secretary of State Anthony Blinken expressed his astonishment today, Saturday, after his recent visit to Baghdad, at the construction in Iraq and the vitality in the capital, while indicating that the Iraqi people deserve this development.
“I was amazed when I arrived in Baghdad by the construction and vitality of the capital,” Blinken said in a speech to reporters after leaving Baghdad, as followed by the Iraqi News Agency (INA), indicating that “important work has been accomplished to ensure that Iraqis receive the necessary services to build a better life.”
He pointed out that “it is impressive that these changes are happening, and the Iraqi people deserve this development.”
Yesterday evening, Prime Minister Mohammed Shia received US Secretary of State Anthony Blinken and discussed with him bilateral relations between the two countries, ways to enhance joint cooperation, as well as discussing the situation in the region, developments in the current events in Syria, and the regional and international efforts required to enhance security in Syria and the stability of the entire region.
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Iraq on the map of change” .. Expert: Expected international decisions will be taken before Trump’s arrival
Political affairs researcher Muhammad Ali Al-Hakim commented on Friday (December 13, 2024) on the call of the United Nations representative in Iraq to take new decisions that serve the current situation to avoid crises in Iraq.
Al-Hakim said in an interview with “Baghdad Today” that “the call of the UN representative after meeting the religious authority in Najaf to take new decisions that serve the situation in Iraq to avoid crises carries a clear message that Iraq is heading towards changes,” noting that “there are important decisions that will be taken in the near future related to the changes taking place in the region, especially with Trump’s imminent assumption of the presidency in the United States of America.”
He added, “The unannounced visit of the US Secretary of State is to complete the upcoming changes in Iraq. There is international and UN movement towards Iraq, and for this reason the new phase will witness major changes on the internal level, as Iraq is part of the change in the map of the new Middle East.”
Yesterday, Mohammad Redha, son of the supreme religious authority, Ali al-Sistani, received the representative of the Secretary-General of the United Nations, Mohammad al-Hassan, and his accompanying delegation, to discuss ways for Iraq to avoid any conflicts that would harm it.
This comes as US Secretary of State Anthony Blinken made a secret visit to Baghdad, where he met with Prime Minister Mohammed Shia al-Sudani, to discuss the situation in the region and developments in Syria, stressing the commitment of the members of the international coalition to the security, sovereignty and stability of Iraq.
