Tue 14 Jul 2020

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Traders set their own price of US dollar higher than one on black market in Homs countryside

2,000 Syrian pound banknote and one US dollar in the city of Idlib - 2 June 2020 (Enab Baladi/Youssef Ghribi.)

2,000 Syrian pound banknote and one US dollar in the city of Idlib - 2 June 2020 (Enab Baladi/Youssef Ghribi.)

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Enab Baladi – Orwah al-Mundhir

The general Syrian markets saw daily fluctuations in the commodity prices last May, with the value of the Syrian Pound (SYP) falling sharply to its lowest exchange rate against the U.S. dollar (USD) in history, about 3,500 SYP per 1 USD, at the end of the same month, prompting several traders to close their stores until the Syrian currency stabilizes. 

In mid-June, the SYP began to recover some of its losses; it saw a considerable increase in its value against the dollar by a difference of approximately one thousand pounds. The pound recorded an exchange rate of 2,700 against the dollar for sale and 2,600 f0r purchase on the 20th of the same month, according to the website of Syrian Pound Today (a Syrian Pound tracking website.) However, the prices of commodities have not recorded any decline. 

The fluctuations of Syrian pound is not over

Traders in the northern countryside of Homs consider that the fluctuations in the exchange rate of the pound against the US dollar have not been over yet, mainly since the US Penal Code, known as the Caesar Act, came into effect on 17 June, according to what was reported by Enab Baladi’s correspondent in the region. 

For example, one of the wholesalers, with whom Enab Baladi’s correspondent communicated, complained that there is a highly volatile exchange rate, which poses serious challenges. The SYP is rising and falling against the USD more than once per day, with differences reaching to more than 300 SYP (0.11 USD) or more. Therefore, the commodities are priced at present, with an increase of 500 (0.19) per dollar. 

That is if the price of the commodities is one thousand dollars and the Syrian currency exchange rate is 2,500, then the commodities will be sold at 3 million Syrian pounds (1,200 USD) instead of 2.5 million Syrian pounds (1,000 USD) to avoid any sudden drop in the Syrian pound and consequently heavy losses. This price in the market is called “trading dollars or pricing.”

The correspondent of Enab Baladi has monitored the closure of most wholesale stores, after the US dollar exchange rate exceeded 2,800 SYP, with the pricing of items in general stalled, due to the suspension of sales and purchases, and the closure of stores.

And when the wholesale stores reopened under a lower exchange rate, the prices of commodities did not decrease.

“We preserve the capital”

Walid Rahhal, the owner of a “half-sale” store in the town of Talbiseh in the northern countryside of Homs, indicated to Enab Baladi that prices did not generally see a decline in the region, and pricing stopped at 3,000 SYP.

Rahhal justified the shutdown of the commercial stores in an attempt to maintain the goods, “not meaning to monopolize them, but rather to avoid obtaining the Syrian currency that is losing its value in real-time.”

He added, “We are traders, and our goal is to preserve our capital invested so that we can continue doing our business and avoid bankruptcy.”

When work resumed across the market, Per 1 USD amounted to 2,500 SYP. But, traders began conducting their commercial transactions based on prices set before the closure, with an increased margin of 300 SYP (0.11 USD) to avoid losses, and when buying or selling the goods, they added from 300 (0.11 USD) to 500 pounds (0.19 USD) to the price of one dollar.

Salaries are the same

The government of the Syrian regime has not made any amendment or issued any decision to raise the salaries of civil servants and pensions, despite the hiking prices of everything. At the same time, the salaries of most employees in the private sector remained as they are without an increase. 

Qassem, a resident of al-Zaafarana village in the northern countryside of Homs, told Enab Baladi that he is working in an oil processing factory, where his salary does not exceed 64,000 SYP (25 USD).

Qassem, who refused to publish his full name for professional reasons, believes that the factory does not lose while the purchasing power of the workers is weakened without an increase in their salary, noting that “A liter of oil before the recent deterioration in the value of the SYP, cost 700 SYP (0.27 USD).

Still, after the depreciation of the SYP, it costs 2,500 SYP per USD, while his salary is not increased proportionally, and his demands along with his co-workers’ to increase their salaries go unheard. 

Qaseem’s case is similar to cases of numerous people whose incomes have not changed, maintained their low rate, which has made more than 82 percent of Syrians below the poverty line, according to data from the World By Map website.

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