STORY SUMMARY

January 17, 2014 12:22 AM
By Suleiman al-Khalidi

(The Daily Star :: Lebanon News :: http://www.dailystar.com.lb)

File – Money changers count Syrian pound notes and U.S dollars at a currency exchange shop in Aleppo’s Bustan al-Qasr district, September 9, 2013. (REUTERS/Abdalghne Karoof)

Syria’s central bank has bought hundreds of millions of dollars from the domestic currency market it now tightly controls, helping to build up depleted reserves for an economy crippled by civil war, bankers and dealers say.

The central bank has amassed at least $600 million by selling local currency since the summer, two well-informed bankers said, and yet this has weakened the pound only slightly to 159 to the dollar from the 140 .

In an irony of a war which has no single front line, bankers say the pound has been supported by $100 million to $200 million flowing into rebel areas in northern Syria.

Lower financing needs for imports as Syria’s international trade crumbles has also reduced demand for dollars.

Bankers and businessmen say authorities long ago ended an import financing scheme that once gave Syrian importers access to cheap dollars for buying industrial goods.

The authorities now offer a preferential dollar rate to only a handful of businessmen importing basic foodstuffs, and much of the commercial food imports that come to Syria are privately financed, businessmen say.

Currency stability has effectively become Syria’s economic confidence index and an sign of the government’s ability to mitigate the effects of war and Western financial sanctions, bankers said

Read more: http://www.dailystar.com.lb/Business/Middle-East/2014/Jan-17/244294-syria-builds-dollar-reserves-thanks-partly-to-assads-foes.ashx#ixzz2qe0Mlz5L
(The Daily Star :: Lebanon News :: http://www.dailystar.com.lb)