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US sanctions against Syria come into effect as currency devalued

US sanctions aimed at preventing a “military victory” by Syrian President Bashar al-Assad came into effect on Wednesday, prompting a devaluation of the country’s currency after weeks of financial turmoil.

The so-called Caesar Act, named after a dissident who leaked evidence of torture in Syrian jails in 2014, aims to cut off revenue for the Syrian government, which after nine years of civil war has managed to retake the majority of the country with the aid of Russia and Iran.

Speaking to the UN Security Council on Tuesday, US Ambassador to the UN Kelly Craft advocated the need for the new sanctions, which would target “bad actors who continue to aid and finance the Assad regime’s atrocities against the Syrian people while simply enriching themselves.

“Our aim is to deprive the Assad regime of the revenue and the support it has used to commit the large-scale atrocities and human rights violations that prevent a political resolution and severely diminish the prospects for peace,” she said.

The act will target foreigners doing business with Damascus, as well as reconstruction of the country.

Security Council members Russia and China slammed the move.

“As vulnerable countries like Syria are struggling with the (coronavirus) pandemic, imposing more sanctions is simply inhumane and may cause additional catastrophes,” said China’s UN Ambassador Zhang Jun.

Russia’s UN Ambassador Vassily Nebenzia said the United States had confirmed “that the purpose of these measures is to overthrow the legitimate authorities of Syria.”

On Wednesday, Syria’s central bank devalued the Syrian pound, giving in to weeks of depreciation on the black market as the new sanctions took effect.

The central bank raised the official exchange rate from 704 to 1,256 Syrian pounds to the dollar, in a statement published on its social media pages.

The previous rate had been in force since March.

Earlier this month, the war-torn country’s currency hit a record low on the black market of around 3,000 pounds to the dollar, sparking rare protests, before appreciating slightly after an apparent injection of dollars.

Syrian pound devalued

On Wednesday, the rate on the parallel market stood at around 2,600 to 2,800 pounds to the dollar, traders told AFP.

Syria’s economy has been battered by nine years of war, and is now reeling from the knock-on effects of a financial crisis in neighbouring Lebanon that has stemmed the flow of dollars into government-held areas.

Anti-government protests in Syria’s Sweida continue for a second week.

Analysts have said the recent lows on the black market are likely due to worries ahead of the introduction of new US sanctions, and the sudden fall from grace of tycoon and cousin of the president, Rami Makhlouf, which has set other top businessmen on edge.

The Damascus government has long blamed the country’s economic crisis on international sanctions.

Last week, President Bashar al-Assad sacked his prime minister of four years after criticism of the government’s handling of the crisis.

Before the conflict, the exchange rate stood at 47 Syrian pounds to the dollar. Source