DAMASCUS: Syria will issue new banknotes, removing two zeros from its currency in an attempt to restore public confidence in the severely devalued pound, according to seven sources familiar with the matter and documents reviewed by Reuters.
The step is intended to strengthen the Syrian pound after its purchasing power collapsed to record lows following a 14-year conflict that ended with President Bashar Assad’s ouster in December.
The Syrian pound has lost more than 99 percent of its value since war erupted in 2011, with the exchange rate now at around 10,000 pounds to the US dollar, compared to 50 before the war.
The sharp depreciation has made daily transactions and money transfers increasingly difficult.
Families usually pay for weekly grocery runs from black plastic bags holding at least half a kilogram of 5,000-pound notes, currently the highest denomination.
In an attempt to ease transactions and improve monetary stability, Syria’s central bank informed private banks in mid-August that it intended to issue new currency by “removing zeros,” according to a document seen by Reuters.
Reuters spoke to five commercial bankers, one central bank source and one Syrian economic official who said the central bank later informed them that two zeros would be removed. They spoke on condition of anonymity to discuss a decision that has not yet been made public.
Meetings on the currency overhaul have been chaired by Central Bank Deputy Governor Mukhlis Al-Nazer, according to the commercial bankers who attended the meetings.
Nazer did not reply to a request for comment. Amal Al-Masri, the head of the central bank’s Banking Supervision Department, declined to comment saying the matter was strictly confidential. The Syrian finance ministry also did not respond to a request for comment.
It was not immediately clear whether the revaluation of the pound would need legislative approval. Syria is set to hold its first elections to set up a new legislative assembly in September.
Two of the bankers and another Syrian source familiar with the matter told Reuters that Syria had agreed with Russian state-owned money printing firm Goznak to produce the new notes.
They said the deal was finalized when a senior Syrian delegation visited Moscow in late July. Goznak, which also printed Syria’s currency during the Assad era, did not respond to requests for comment.
Political Shift
Under Assad, the use of foreign currencies was outlawed, but Syria’s new leaders pledged to create a free-market economy and lifted restrictions to ease cash flow.
While the economy has swiftly dollarised, with US dollar prices everywhere from store fronts to fuel pumps, there are concerns about a Syrian pound liquidity crunch in a country with limited infrastructure for digital payments.
Three of the Syrian bankers said one driving force behind the planned currency overhaul was concern over an estimated 40 trillion pounds circulating outside Syria’s formal financial system. Issuing new notes would grant the government better oversight over the cash in circulation.
It also carries symbolic weight, signalling a clear break from more than five decades of Assad rule. Bashar Assad’s face appears on the 2,000-pound purple note, while his father, Hafez, features on the green 1,000-pound one.
Officials plan an information campaign in the coming weeks before the formal launch of the new notes on December 8, the one-year anniversary of Assad’s ouster.
Two commercial bank directors told Reuters that Syria’s central bank has instructed lenders to be ready for the roll out by mid-October.
Central bank circulars seen by Reuters asked banks to produce detailed reports on their infrastructure, including the number of cameras, cash counters, and storage capacity, and run tests to ensure automated systems could handle the new currency.
All five commercial bankers said they were told that a 12-month “coexistence period” will allow both old and new notes to circulate until December 8, 2026.
Karam Shaar, a leading Syrian economist and consultant to the United Nations, said replacing banknotes featuring Assad’s image was a necessary political shift.
But he warned that the revaluation could confuse consumers, especially the elderly, and there was a lack of a clear regulatory framework or plan for full national implementation, given the gaps in the state’s territorial control.
“Alternatively, Syria could issue higher denominations of the same currency, say 20,000 or 50,000-pound notes, which would achieve similar goals in terms of easing cash handling and storage, while avoiding the substantial cost of a full currency overhaul, which could run into hundreds of millions of dollars,” Shaar told Reuters.
Syria to revalue currency, dropping two zeros in bid for stability, sources say
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Syria to revalue currency, dropping two zeros in bid for stability, sources say
- Syria will issue new banknotes, removing two zeros from its currency in an attempt to restore public confidence in the severely devalued pound
- The Syrian pound has lost more than 99 percent of its value since war erupted in 2011, with the exchange rate now at around 10,000 pounds to the US dollar
Israeli army takes journalists into a tunnel in a Gaza city it seized and largely flattened
- Israel and Hamas are on the cusp of finishing the first phase of the truce, which mandated the return of all hostages, living and dead, in exchange for Palestinians held by Israel
- Hamas has said communication with its remaining units in Rafah has been cut off for months and that it was not responsible for any incidents occurring in those areas
RAFAH, Gaza Strip: One by one, the soldiers squeezed through a narrow entrance to a tunnel in southern Gaza. Inside a dark hallway, some bowed their heads to avoid hitting the low ceiling, while watching their step as they walked over or around jagged concrete, crushed plastic bottles and tattered mattresses.
On Monday, Israel’s military took journalists into Rafah — the city at Gaza’s southernmost point that troops seized last year and largely flattened — as the 2-month-old Israel-Hamas ceasefire reaches a critical point. Israel has banned international journalists from entering Gaza since the war began more than two years ago, except for rare, brief visits supervised by the military, such as this one.
Soldiers escorted journalists inside a tunnel, which they said was one of Hamas’ most significant and complex underground routes, connecting cities in the embattled territory and used by top Hamas commanders. Israel said Hamas had kept the body of a hostage in the underground passage: Hadar Goldin, a 23-year-old soldier who was killed in Gaza more than a decade ago and whose remains had been held there.
Hamas returned Goldin’s body last month as part of a US-brokered ceasefire in the war triggered by the militants’ Oct. 7, 2023, attack on southern Israel in which 1,200 people were killed and hundreds taken hostage. Israel’s retaliatory offensive has killed more than 70,000 Palestinians, according to Gaza’s Health Ministry, which operates under the Hamas-run government. The ministry does not differentiate between civilians and combatants, but says roughly half the dead have been women and children.
Israel and Hamas are on the cusp of finishing the first phase of the truce, which mandated the return of all hostages, living and dead, in exchange for Palestinians held by Israel. The body of just one more hostage remains to be returned.
Mediators warn the second phase will be far more challenging since it includes thornier issues, such as disarming Hamas and Israel’s withdrawal from the strip. Israel currently controls more than half of Gaza.
Israeli Prime Minister Benjamin Netanyahu is set to travel to Washington this month to discuss those next steps with US President Donald Trump.
Piles of rubble line Rafah’s roads
Last year, Israel launched a major operation in Rafah, where many Palestinians had sought refuge from offensives elsewhere. Heavy fighting left much of the city in ruins and displaced nearly one million Palestinians. This year, when the military largely had control of the city, it systematically demolished most of the buildings that remained standing, according to satellite photos.
Troops also took control of and shut the vital Rafah crossing, Gaza’s only gateway to the outside world that was not controlled by Israel.
Israel said Rafah was Hamas’ last major stronghold and key to dismantling the group’s military capabilities, a major war aim.
On the drive around Rafah on Monday, towers of mangled concrete, wires and twisted metal lined the roads, with few buildings still standing and none unscathed. Remnants of people’s lives were scattered the ground: a foam mattress, towels and a book explaining the Qur’an.
Last week, Israel said it was ready to reopen the Rafah crossing but only for people to leave the strip. Egypt and many Palestinians fear that once people leave, they won’t be allowed to return. They say Israel is obligated to open the crossing in both directions.
Israel has said that entry into Gaza would not be permitted until Israel receives all hostages remaining in the strip.
Inside the tunnel
The tunnel that journalists were escorted through runs beneath what was once a densely populated residential neighborhood, under a United Nations compound and mosques. Today, Rafah is a ghost town. Underground, journalists picked their way around dangling cables and uneven concrete slabs covered in sand.
The army says the tunnel is more than 7 kilometers (4 miles) long and up to 25 meters (82 feet) deep and was used for storing weapons as well as long-term stays. It said top Hamas commanders were there during the war, including Mohammed Sinwar — who was believed to have run Hamas’ armed wing and was the younger brother of Yahya Sinwar, the Hamas leader who helped mastermind the Oct. 7 attack. Israel has said it has killed both of them.
“What we see right here is a perfect example of what Hamas did with all the money and the equipment that was brought into Gaza throughout the years,” said Lt. Col. Nadav Shoshani. “Hamas took it and built an incredible city underground for the purposes of terror and holding bodies of hostages.”
Israel has long accused Hamas of siphoning off money for military purposes. While Hamas says the Palestinians are an occupied people and have a right to resist, the group also has a civilian arm and ran a government that provided services such as health care, a police force and education.
The army hasn’t decided what to do with the tunnel. It could seal it with concrete, explode it or hold it for intelligence purposes among other options.
Since the ceasefire began, three soldiers have been killed in clashes with about 200 Hamas militants that Israeli and Egyptian officials say remain underground in Israeli-held territory.
Hamas has said communication with its remaining units in Rafah has been cut off for months and that it was not responsible for any incidents occurring in those areas.
Both Israel and Hamas have accused each other of repeated violations of the deal during the first phase. Israel has accused Hamas of dragging out the hostage returns, while Palestinian health officials say over 370 Palestinians have been killed in continued Israeli strikes since the ceasefire took effect.
