Mon 18 Jun 2018

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Has the Turkification of Currency Begun in Northern Syria?

Exchanging dollars to Turkish lira in rural Aleppo – May 30, 2018 (Facebook)

Exchanging dollars to Turkish lira in rural Aleppo – May 30, 2018 (Facebook)

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The use of the Turkish lira is being encouraged by Ankara and the fall in the Syrian pound is making it look like a good alternative writes Enab Baladi.

The record decline in the Turkish lira due to political and economic reasons, has cast its shadow over northern Syria, which is militarily and economically supported by Ankara — whether in the weak commercial traffic in the markets, or local councils moving to support the lira.

The Turkish lira has seen a sharp decline and lost about 18 percent of its value against the dollar since the start of the year, while in May alone it lost 10 percent because of the conflict between the government and the Central Bank over the lowering of interest rates, alongside Turkish preparations for presidential elections.

The decline of the lira has impacted markets in the Aleppo countryside, which has affected some goods, as a result of the weak commercial traffic, despite Eid al-Fitr approaching, when markets should see economic activity.

Jibran Bakour, the owner of a wholesale shop in the town of Suran, attributed the decline in the market to residents receiving salaries in Turkish lira and exchanging them for Syrian pounds. The difference in the currencies and the decline of the exchange rate in recent weeks means that people are losing about 25,000 Syrian pounds a month.

Most employees (in medical institutions, schools, police and local councils) receive their salaries in Turkish lira, with teachers’ salaries at a median of about 500 lira, while police officers receive about 800 lira, doctors get 3,000 lira and medics 600 lira.

Residents exchange their salaries into Syrian pounds to use in markets. The exchange rate at the beginning of 2013 had been between 120 and 130 Syrian pounds to the lira while it now ranges between 90 and 97 pounds to the lira. This creates total losses for residents of 20,000 to 25,000 Syrian pounds a month.

Regarding the reason residents receive their salaries in Turkish lira, Pelham Jazmati, a researcher at the Syrian Economic Forum, told Enab Baladi that most foreign grants that come to the area enter through the Turkish government, or by way of civil society groups which Ankara makes convert any amount entering into the Aleppo countryside from dollars into Turkish lira.

The salaries for fighters in the Free Syrian Army in the Aleppo countryside and Idleb, which Turkey supports, are also paid in Turkish lira, with the normal salary of a fighter at about 500 Turkish lira.

Aiming to support the Turkish lira and decrease the impact of its decline on the area, local councils in the Aleppo countryside have launched an initiative to support the Turkish lira against the dollar.

In a statement on May, 29, 2018, the Azaz council called for all traders and economic actors to deal in Turkish lira and exchange their money for Turkish lira.

The Head of the Council, Mohamed al-Hajj Ali, told Enab Baladi, that the initiative came as a “goodwill” gesture to the Turkish government, which supports employees in education, the police, the local council, judiciary and all workers in government departments.

He added that the major decline witnessed in the last few days has had an impact on employees working in the northern Aleppo countryside, especially given that it coincides with the month of Ramadan, and the increased need of residents to shop.

Meanwhile, the local council in the city of Meraa has called on traders, manufacturers and citizens to buy larger quantities of Turkish liras, “because of the effect this would have on increasing its buying power, raising its market value and supporting our Turkish brothers in the economic war that is being waged by its enemies, and contributing to stabilizing the Turkish lira,” as they put it. In addition to “contributing to a show of goodwill offered to our Turkish brothers for standing alongside us in our war against the forces of oppression and terrorist takfiris.”

The council’s steps have led some to believe that this is the beginning of dealing solely in Turkish lira, especially in light of calls over the last two years to use the Turkish currency in opposition areas because it is an economic necessity to end dependency on the Syrian regime.

However Jazmati said that the local councils’ initiatives to support the Turkish economy do not mean giving up the Syrian pound, which is still used locally.

Regarding the future, the economic researcher said that the political situation in the area and the political arrangements are what will decide the future. Adding that if matters stay as they are, then commercial dealings will determine the currency that is used, especially in dealings between traders or dealing with Turkey.

He said that a large portion of the traders in the Aleppo countryside were trading with Turkey, which meant that even if residents retain the Syrian pound as a basic currency, the Turkish lira will have more circulation as a result of commerce. He said that if residents were to choose between the Syrian pound and the Turkish lira they would choose the latter because of the weakness of the Syrian pound and the loss of its value.

 

This article was translated and edited by The Syrian Observer. Responsibility for the information and views set out in this article lies entirely with the author.

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