Syrian banks step up strategies to lure retail deposits

Deposits are returning to Syria' s banks after months of withdrawals, signaling that the country's economy, which is severely battered by the three-year-old conflict, is bouncing back, local media reported. Banks' deposits have been surging in the past months, with average daily deposits in the state-owned banks reaching 120 million Syrian pounds, or 827,586 U.S. dollars, and daily withdrawals around 30 million Syrian pounds, or 206,896 dollars. The rising deposits show that previous concerns about the depreciation of the pound have faded away, the report said, adding that a good deposit interest offered by some public banks are attracting people to increase their deposits. Syrian monetary authorities have been stepping up strategies to lure retail deposits and taking measures to achieve more flexibility to meet market demands. Since the very beginning of the crisis, Syria has launched banking deposit certificates with interest rate at 10 percent in a bid to encourage deposits and savings in national currency and allowed Syrian citizens to open accounts in hard currency in order to end the decades-long government's domination in money exchanging operations. The value of Syria's pound has been in decline in the past few months since the Syrian crisis due to the capital flight from the country. Meanwhile, the European and U.S. sanctions have also prompted Syrians to withdraw their savings and rush to buy dollars and gold as a safeguard against inflation, creating heavy pressure for the currency to keep stable. Since March 2011, the pound was sold for about 47 per dollar through both official channels and the black market. It has been sliding ever since, particularly on the black market, as the demand for foreign currency surged while foreign currency earnings from oil exports and tourism plunged. The Central Bank of Syria has intervened vehemently in the black market for many times and succeeded in keeping the pound's depreciation at a manageable rate, with the pound's value in the black market staying at around 155 per dollar at the beginning of 2014. Governor of the central bank Adib Mayyaleh said recently that the bank has pumped big sums of hard currency, most of which is dedicated to fund imports in order to bring back equilibrium to the market. The central bank will continue its interference in the financial market to meet imports market, which has doubled over the past few days, indicating that Syrian industry production is in motion again and economy is recovering.