Syria moves to preserve currency value by financing imports

The Central Bank of Syria (CBS) reached an agreement with two exchange companies to sell 3 million U.S. dollars per day in the black market for the purposes of financing imports, the local Syria Steps website said on Saturday. The bank has recently stressed that it will finance imports worth three million dollars a day, adding that requests for financing of imports during the first quarter of this year did not exceed 50 million dollars a month. The Syrian government, in a drive to control the market and prevent any slip in the value of the Syrian pound, has increased its financing of imports following the recent depreciation in the pound against the U.S. dollar after several months of stability. The Monetary and Credit Council has announced that it will increase its intervention in the foreign exchange market to preserve the value of the pound and prevent any deterioration in its value. Syrian Prime Minister Wael al-Halqi said recently that the government has new measures to maintain the stability of exchange rate of the pound against the dollar despite its slight rise. On Thursday, the dollar rose to 177 pounds in the morning and slid in the afternoon immediately following the announcement of the CBS that it will hold an intervention session that will be followed by subsequent session next week. The pound has been stable for several months and was trading at 155 pounds per dollar. The pound rebounded from a record decrease that reached more than 300 pounds to the dollar last July, as fears of U.S. military action in Syria have vanished. But traders said that the main cause was the crackdown on speculation in the black market. Syrian officials contended that the devaluation of the pound was triggered by internal factors represented by speculation in the market, in addition to external factors including the economic sanctions. However, the economy was basically harmed by the events experienced by the country that have largely cash reserve in the banks. Syria has recently passed a decree criminalizing those who might deal with any foreign currency other than the Syrian pound in commercial trading or cash payments.