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Syria’s central bank has flew from Russia’s fresh banknotes to alleviate severe cash shortages, which has made its economy work hard.
The central bank said on Friday that the Syrian pound had “acrossed Syria from Russia through the Damascus International Airport” but did not confirm the currency quantity. Cash is desperate for cash after bankers and businesses say shortages have severely hindered business.
The flight highlighted an area of continued reliance on new governments in Russia, which faced difficulties in sourcing banknotes from the West due to the state’s sanctions, forcing it to deliveries with a country closely related to the overthrewed Bashar regime. Al-Assad.
A textile manufacturer and retailer, who asked not to be named, said the shortage had reached “people have stopped investing in banks because they fear they can’t take it out”.
Rumors spread on Syria’s social media about the arrival of eagerly anticipated notes, but the central bank said Friday that “the figures about the size and quantity of the money are “completely inaccurate” without confirming details.
Foreign Minister Asad al-Shaibani told the Financial Times last month that under the Assad government, the central bank will order printed currencies from Russia when needed. The state-owned Russian printer Goznak provides notes that must be changed continuously.
According to banknote experts, Western banknote printers will not be able to increase supply immediately in light of continued sanctions on the country and are reluctant to provide cash for Syria, which has left the new government temporarily relying on Goznak.
It is not clear whether the new regime is seeking to remove some Syrian banknotes from circulation. One of the most widely used notes, the bill of 2,000 Syrian pounds, in the image of Assad, now lives in Russia.
Central banks lifted temporary restrictions on withdrawals late last month, but businesses and retail customers seeking cash from banks are still often turned away.
In recent weeks, some private banks have received up to £600 million per day from central banks (about $65,000 on the black market).
The businessman said the amount was far from enough to make the company float. Manufacturers and traders cannot obtain most bank deposits to pay suppliers and salaries.
“Traders keep paying employees [cash] Reserves have been working for two months, but how long can they last? “A banker said.
Transfers can still be made between banks, and merchants occasionally use this method to buy and sell goods – a system that has been likened to be “forgery”.
The impact of cash shortages has been intensified due to the lack of information about the circulating Syrian pounds.
Unlike most central banks, Syria does not publish detailed information about the number of banknotes in circulation every week. Its website is inaccessible, increasing opacity around its operations.
Due to wear and tear, banknotes are usually destroyed and disappear every day, and central banks around the world keep replenishing their stocks.
Syria’s two decades-old private banking systems are primarily used for commercial purposes, and citizens tend to keep their own cash.
The trend to avoid the banking system has grown in the years before the collapse of Assad, when the regime began providing financial information to a handful of private banks in Syria to impose temporary taxes on large income earners.
Syria’s economy has been undermined by a 13-year civil war, with widespread corruption in the Assad regime and Western sanctions, including its banking industry.
The companies said that despite the widespread rejoicing of Assad’s eviction, their sales fell. Some people are under pressure after the lifting of export restrictions, which means they must now sell their existing stocks at a loss.
“People are not spending because they don’t know what will happen,” the textile businessman said. “Because there is no cash income, the company has no spending, and the main priority is to pay employees.”
Meanwhile, most of the sanctions imposed by Western governments on Syria and its banking sector have reached an appropriate attitude. Some officials, including the EU, have formulated a roadmap to mitigate the stage of measures.
“There are a lot of signs of confusion and lack of clarity,” said Jihad Yazigi, editor of Syrian news media Syrian report. “The economy is a big problem. . The key test of Damass reform authorities will be to ensure that [a] Stable supply. . . Energy and bread, more generally, ensure the economy starts again. ”
