The Syrian Central Bank governor recently announced that the Syrian pound is "likely to improve" in the coming period, citing "promising" economic indicators. The statement comes amidst ongoing efforts to stabilize the nation's currency, which has faced significant pressures in recent years. Observers are keenly watching for further details on the specific measures and trends supporting this optimistic outlook from the nation's financial authorities. The governor's remarks offer a rare public assessment of the currency's near-term trajectory and the Central Bank's strategic direction. This declaration signals a period of heightened focus on monetary stability and economic reform within Syria.
Currency Replacement Efforts and Their Aims
A significant component of the Central Bank's strategy involves full currency replacement efforts. These initiatives are designed to streamline daily transactions by removing two zeros from older banknotes, a move intended to simplify pricing and accounting. The replacement process aims at eliminating symbols associated with the Assad era from the national currency, a step that carries both practical and symbolic weight in the post-conflict environment. This extensive undertaking has already seen 56% of the national money supply replaced to date, indicating substantial progress in the implementation phase of the program.
The Central Bank of Syria is conducting this currency replacement process exclusively through established banking channels, according to officials. This approach ensures a regulated and controlled transition, aiming to prevent illicit activities and maintain oversight over the money supply. This method also encourages citizens to engage with the formal banking sector, potentially strengthening the financial system. The exclusive reliance on banks for this critical operation shows the Central Bank's commitment to a structured and transparent exchange process.
Concurrently, plans are underway to expand the number of exchange centers available to the public in the cities of Hasakah and Raqqa. This expansion is key for ensuring equitable access to the currency replacement services, particularly in regions that may have limited banking infrastructure. By increasing the accessibility of these centers, the Central Bank aims to facilitate a smoother and more efficient transition for all citizens, ensuring that the benefits of the currency overhaul reach a wider population. The strategic placement of these new centers is designed to serve communities effectively and integrate them into the national financial framework.
The Syrian pound has experienced sharp fluctuations in its value since the fall of the former regime, reflecting the complex economic and geopolitical landscape of the country. These fluctuations have posed considerable challenges for businesses and ordinary citizens alike, impacting purchasing power and economic stability. Since early 2026, the exchange rate for the Syrian pound has consistently exceeded SYP 13,000 to the US dollar, a stark indicator of the ongoing economic pressures and the depreciation of the national currency. This sustained high exchange rate notes the urgency and importance of the Central Bank's current stabilization efforts.
Managed Float and Monetary Policy Interventions
The governor of the Central Bank of Syria cited several key economic factors contributing to the potential improvement of the Syrian pound. These include rising domestic production, which can bolster the national economy and reduce reliance on imports, and tighter government regulation of imports, aimed at conserving foreign currency reserves and promoting local industries. These measures are foundational to the Central Bank's broader strategy for currency stabilization. The Central Bank's current monetary approach is described as resembling a "managed float," a system where the currency's value is largely determined by market forces but is subject to intervention by the central bank to prevent excessive volatility. This approach seeks to balance market efficiency with stability.
Adham Qudaimati, a Central Bank official, provided further insight into the institution's stance on foreign currency intervention. He stated unequivocally that the Central Bank does not need to inject foreign currency into the market to support the pound. "The Central Bank does not need to do so because the dollar is already present in sufficient quantities," Qudaimati explained, suggesting that the issue is not a shortage of foreign currency but rather other structural or speculative factors. He also emphasized a broader perspective on the currency's performance, cautioning against a narrow focus solely on the exchange rate. "It is not possible to assess the pound’s prospects solely through the exchange rate. But there will be real opportunities for improvement in the coming period," Qudaimati affirmed, indicating a more holistic view of economic health.
Measures implemented under this managed float strategy are full and multifaceted. They include tightening liquidity within the financial system, a move designed to control inflation and stabilize the money supply. Additionally, the Central Bank has established daily withdrawal limits for bank account holders, a measure aimed at managing cash flow and preventing large-scale capital flight. The Central Bank has also overseen the resumption of trading on the Damascus Securities Exchange, a critical step towards normalizing financial market operations and restoring investor confidence. Efforts are underway to regulate cryptocurrency activity within the country, addressing the challenges posed by digital currencies to traditional monetary control. Alongside these initiatives, the opening of the Damascus foreign exchange and gold market represents another significant step towards creating a more regulated and transparent financial environment. These steps are part of a broader strategy to exert more strong control over currency dynamics and foster a more stable and predictable economic environment within Syria.
Expert Analysis and Outlook on the Pound's Trajectory
Political and economic researcher Mohammed Zakoun Kouka offered a critical perspective on the currency replacement initiative. While acknowledging that currency replacement facilitates transactions by modernizing the physical currency, he stated that it does not, by itself, constitute a full economic reform plan. Kouka's analysis suggests that while the measure is practical, it must be accompanied by deeper structural reforms to achieve lasting economic stability. The Central Bank of Syria recently extended the exchange period for its currency replacement initiative, providing citizens with additional time to swap older banknotes. This extension reflects a pragmatic approach, recognizing the logistical challenges faced by the populace and aiming to ensure a smooth transition for all.
Economic researcher Adham Qudaimati, commenting on the dynamic nature of the currency's value during this period, remarked that fluctuations in the Syrian pound's value are "natural" during the replacement process. Qudaimati explained that these fluctuations occur as old currency re-enters the market, creating temporary supply and demand dynamics that can impact the exchange rate. He also provided a specific projection for the currency's future, predicting the pound might reach SYP 15,000 to the dollar by the end of the replacement period. This forecast offers a glimpse into the potential challenges that may still lie ahead even as the replacement process concludes. Previously, between late 2024 and early 2025, the pound traded between SYP 10,000 and SYP 11,000 to the dollar, noting the recent depreciation and the volatility that has characterized the currency's performance.
Qudaimati had also previously indicated that the Central Bank of Syria does not need to inject foreign currency into the market, reiterating his earlier stance. "The Central Bank does not need to do so because the dollar is already present in sufficient quantities," Qudaimati stated, reinforcing the idea that the country's foreign currency reserves are adequate. He emphasized a broader view of the currency's performance, noting, "It is not possible to assess the pound’s prospects solely through the exchange rate. But there will be real opportunities for improvement in the coming period." This perspective suggests that while the exchange rate is an important indicator, it does not tell the whole story of the Syrian economy's health or its future potential.
Broader Reform Imperatives for Sustainable Growth
Economic analysts emphasize that a truly full economic plan for Syria would necessitate a broader range of interventions beyond monetary policy adjustments. Such a plan would require significant foreign deposits or loans to bolster national reserves and provide much-needed liquidity. Increased foreign investment is also seen as key for stimulating economic growth, creating jobs, and transferring essential technology and expertise. Enhanced regional trade would open new markets for Syrian products and facilitate the import of necessary goods, thereby integrating Syria more deeply into the regional economy. Additionally, improved domestic production across various sectors is vital for self-sufficiency and economic resilience. Finally, updated and modernized legislation is essential to create a favorable business environment, protect property rights, and ensure legal predictability for both local and international investors.
Economic researcher Abdul Azim Al-Mughrabil cautioned that improved monetary indicators alone are insufficient for citizens to experience tangible relief from economic hardships. He articulated a common sentiment regarding market dynamics in Syria: "The Syrian market passes on price increases quickly but transmits improvements very slowly." This observation notes the challenge of translating macroeconomic gains into palpable benefits for the average citizen. Al-Mughrabil elaborated that a noticeable and sustained positive impact requires a confluence of factors, including a prolonged period of exchange-rate stability, which would allow businesses to plan with greater certainty and consumers to regain purchasing power. Smoother payment and import chains are essential for ensuring the consistent availability of goods and raw materials, reducing supply-side pressures. Lastly, he stressed the need for reduced pressure stemming from energy costs, transport logistics, and the ongoing effects of the war, all of which contribute significantly to the high cost of living. "Promising indicators matter, but they only become part of daily life once they turn into sustained stability," Al-Mughrabil added, showing the importance of long-term, consistent improvements over fleeting positive signals.
