Syrian pound plummets as new US sanctions loom

Syrian pounds are pictured inside an exchange currency shop in Azaz, Syria. (File/Reuters)
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Updated 06 June 2020

Syrian pound plummets as new US sanctions loom

  • Syria is in the thick of an economic crisis compounded by a coronavirus lockdown and a dollar liquidity crunch in neighboring Lebanon
  • The UN food agency said any further depreciation risked increasing the cost of imported basic food items

BEIRUT: Syria’s pound hit record lows on the black market Saturday trading at over 2,300 to the dollar, less than a third of its official value, traders said, ahead of new US sanctions.
Three traders in Damascus told AFP by phone that the dollar bought more than 2,300 Syrian pounds for the first time, though the official exchange rate remained fixed at around 700 pounds to the greenback.
After nine years of war, Syria is in the thick of an economic crisis compounded by a coronavirus lockdown and a dollar liquidity crunch in neighboring Lebanon.
Last month, the central bank warned it would clamp down on currency “manipulators.”
Analysts said concerns over the June 17 implementation of the US Caesar Act, which aims to sanction foreign persons who assist the Syrian government or help in post-war reconstruction, also contributed to the de fact devaluation.
Zaki Mehchy, a senior consulting fellow at Chatham House, said foreign companies — including from regime ally Russia — were already opting not to take any risks.
With money transactions requiring two to three weeks to implement, “today’s transactions will be paid after June 17,” he said.
Heiko Wimmen, Syria project director at the conflict tracker Crisis Group, said that with the act coming into force, “doing business with Syria will become even more difficult and risky.”
Both analysts said the fall from grace of top business tycoon Rami Makhlouf despite being a cousin of the president was also affecting confidence.
“The Makhlouf saga is spooking the rich,” Wimmen said.
After the Damascus government froze assets of the head of the country’s largest mobile phone operator and slapped a travel ban on him, the wealthy feel “nobody is safe,” he said.
They are thinking “you better get your assets and perhaps yourself out preparing for further shakedowns,” he said.
Mehchy said the impact of the pound’s decline and ensuing price hikes on Syrians would be “catastrophic.”
Most of Syria’s population lives in poverty, according to the United Nations, and food prices have doubled over the past year.
The UN food agency’s Jessica Lawson said any further depreciation risked increasing the cost of imported basic food items such as rice, pasta and lentils.
“These price increases risk pushing even more people into hunger, poverty and food insecurity as Syrians’ purchasing power continues to erode,” the World Food Programme spokeswoman said.
“Families may be forced to cut the quality and quantity of food they buy.”


UN official: 700 people died in Syrian camps for Daesh families

Updated 32 min 8 sec ago

UN official: 700 people died in Syrian camps for Daesh families

  • Vorontsov told a news conference Thursday that the people, including children, died of “lack of medicine, lack of food” at the Al-Hol and Roj camps
  • The overcrowded camps have a high child mortality rate

UNITED NATIONS: The UN counterterrorism chief said his office received information that 700 people died recently in two camps in northeast Syria, where more than 70,000 mainly women and children connected to Daesh fighters are detained in “very dire conditions.”
Vladimir Vorontsov told a news conference Thursday that the people, including children, died of “lack of medicine, lack of food” at the Al-Hol and Roj camps, which are overseen by Kurdish-led forces allied with the United States who spearheaded the fight against Daesh.
He said the deaths in the camps created “feelings of anger.”
Vorontsov did not clarify when the 700 reportedly died or what the source of the information was. The Kurdish Red Crescent said in January that 511 people died in the largest camp, Al-Hol, in 2019. The overcrowded camps have a high child mortality rate. So far, there has been no known outbreak of coronavirus in the camps. A UN team visited the largest one earlier this month.
Vorontsov urged the international community to tackle “the huge problem” of what to do with these people, saying keeping them in camps “is very dangerous.” He warned that “they could create very explosive materials that could be very helpful for terrorists to restart their activities” in Syria and Iraq.
Daesh, which once controlled large swathes of Iraq and Syria, lost its last Syrian strongholds in early 2019. But despite the loss of its self-styled caliphate, UN experts said earlier this year that the extremist group is mounting increasingly bold attacks in Syria and Iraq and is planning for the breakout of its fighters in detention facilities.
In addition to the Al-Hol and Roj camps, the Kurdish fighters are guarding thousands of Daesh fighters and boys in prisons.
After Daesh militants lost control of the oil-rich northeast, Turkey invaded areas along its borders last October and now controls slivers of land in the very complex region. There are tensions between the Turkish-allied fighters and Kurdish groups, which Ankara considers terrorists. In addition, hundreds of US troops remain in northeast Syria.
The International Crisis Group reported on April 7 that there are 66,000 women and children in Al-Hol and 4,000 in Roj, most of them relatives of Daesh extremists, “but some former affiliates of the group themselves.” The Brussels-based think tank said that the majority are either Syrians or Iraqis, with the numbers roughly split, and around 13,500 are from other countries.
The group said humanitarian workers described the detention sites “as ridden with tuberculosis and perilously overcrowded, with one speaking of `dramatic mortality rates’.”
Vorontsov said “no country would like to have these people back, with this very negative and very dangerous terrorist background.”
But he said there are about 9,000 children and the first priority should be to save those under 6 years old, “because in this period of time children are absolutely not in the position to be indoctrinated.”
Vorontsov said the UN Office of Counter-Terrorism, which he heads, is pushing the issue very strongly with countries whose citizens are detained. Only a small number are repatriating their citizens, including Central Asian countries, the United States and Russia, he said.
Women are “a more difficult story,” Vorontsov said.
There are “victims of terrorism” who didn’t understand what they were doing when they accompanied the men in their families to Syria and Iraq, he said, “but there are a lot of radicalized women among detained people in camps.”
Vorontsov said he believes the way forward is to prosecute the women and then rehabilitate and reintegrate them into society, but he conceded that it’s “a very challenging issue.”