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Residents of northwestern Syria replace Syrian pound with Turkish lira

Syrian citizens replacing the Syrian pound with the Turkish lira in Idlib city - June 2020 (Enab Baladi / Yousef Ghuraibi)

Syrian citizens replacing the Syrian pound with the Turkish lira in Idlib city - June 2020 (Enab Baladi / Yousef Ghuraibi)

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Idlib – Yousef Ghuraibi

The residents of the opposition controlled-areas have been adjusting to the circulation of the Turkish lira in their areas, following the decision of the “Syrian Salvation Government” (SSG) in Aleppo countryside and the “Syrian Interim Government” (SIG) in Idlib to replace the Syrian pound with the Turkish lira and the US dollar in their areas of influence. These decisions came after the depreciation of the Syrian pound against foreign currencies, during close periods of time.

The rapid devaluation of the Syrian pound has led to “crazy” price hikes despite the slight recovery in the pound’s value recently. This has weakened the citizens’ purchasing power, and forced economic officials to seek solutions.

In an interview with Enab Baladi, the minister of economy in the “Syrian Interim Government” (SIG) Abdul Hakim al-Masri, said that maintaining citizens’ purchasing power is one of the most important benefits of the currency replacement.

Al-Masri expected that no one would accept the Syrian pound circulation two months after the implementation of the US sanctions imposed on the Syrian regime known as the Syria Civilian Protection Act (the Caesar Act), which came into force on 17 June.

Benefits of currency replacement for citizens of opposition-held areas

Mahmoud Daeimis, a resident of Idlib city, said to Enab Baladi that the switching to the Turkish banknotes instead of the Syrian ones was a popular request by those in the areas controlled by the opposition factions for several years.

He said, “this move would break the association of our areas with the Syrian regime which has been killing us, destroying our houses, displacing us, and using our money to kill us.”

Minister al-Masri confirmed what Daeimis said by indicating that calls for replacing the Syrian pound with the Turkish lira and the US dollar started in 2015; however, things did not reach clear results at that time.

Al-Masri added, back then, proposals were made to use the Jordanian dinar and the US dollar instead of the Syrian pound in southern Syria. While the Syrian north would replace the pound with the US dollar and the Turkish lira, depending on the conditions of the areas on Syria’s borderlines.

The SIG reiterated the call in October 2019 and held awareness-raising sessions regarding the foreign currency trading subject.

As for Daeimis, the switching to the Turkish lira is for the public interest to stop the price increase.

He added, the currency replacement would stop the monopoly of goods and prevent people’s further loss of money due to the Syrian currency’s fall in value against foreign currencies, mainly that the majority of goods and trade activity of areas under the opposition’s control are based on import, and paid in hard currencies.

According to Daeimis, “the transition from Syria’s debilitating currency to a stable one would help stabilize the markets.”

“There would be no room for monopoly, manipulation, or selling goods at whatever price the traders want,” Daeimis said.

He added, “thus, in this way prices would be fixed with no fluctuation from time to time, as the exchange rate changes, which will save people’s money from being lost due to commodities’ price differentials.”

He believes that stopping the circulation of the Syrian pound in northwestern Syria will deprive the regime the access to the hard currencies in the area.

Khaled al-Hammada, a worker in a plant for the production of concrete blocks, will no longer take his daily wage in the Syrian pound, but in the Turkish lira, expecting it to equal ten Turkish liras for each day of work.

In his opinion, the benefit of transitioning to the Turkish lira is that shop owners will no longer use the fluctuating exchange rate against the Syrian pound to manipulate the rate difference to get higher prices for their goods, making the residents the only losers.

Al-Hammada continued saying that if the currency replacement happens, the prices will be stable, which will be positively reflected on him.

 How will the purchasing power be in proportion to the income?

According to the economic official of the SSG, Basil Abdul Aziz, the prices of goods in the shops are determined by their source.

He said the imported commodities or those produced with imported materials are priced in the US dollar and converted into the Turkish lira according to the exchange rate.

While the rest of the goods’ pricing is left to the traders in the market of supply and demand, then the traders transfer the cost from the US dollar to the Turkish lira.

Abdul Aziz confirmed that in order to control the market and prevent manipulation, there would be frequent patrols for price monitoring and checking the sellers’ selling and purchasing bills.

These patrols will have a specified share of the profit, according to Abdul Aziz.

He added that each union was assigned to set the minimum wages of the category it represents.

According to Abdul Aziz, the Free Economists Syndicate has conducted a study to set the minimum wages for all workers, provided that the minimum wages would be approved in the areas under the SSG control at the beginning of next week.

The gradual transition to the Turkish currency will end the use of the Syrian pound

Abdul Aziz pointed out to Enab Baladi that the continued fluctuation and devaluation of the Syrian pound will reduce its demand because it is crippling the economy in Syria.

People are looking for a more stable currency; therefore, the Turkish lira’s use has become an urgent need in most transactions.

According to Abdul Aziz, As long as the Turkish lira has not covered the market’s needs so far, the price change will not be significant, and the price swing will remain as long as some goods are still priced in the Syrian pound.

Other commodities are priced in the Syrian and Turkish currency; however, “once the Turkish lira is adopted on a wide range, the prices will be stabilized,” as per Abdul Aziz’s expression.

A salary paid in a stable currency 

According to Abdul Aziz, the circulation of the Syrian pound has caused great trouble, as its value kept fluctuating up and down at different times of the same day.

He added that this gave plenty of room for manipulative and greedy people to exploit the situation; hence, “the use of the Turkish lira became a must to prevent some traders’ opportunistic practices.”

On the other hand, al-Masri believes that the Syrian pound has lost its functions as a currency. It is no longer a measure of value or a tool for saving.

The Syrian pound has lost its public acceptance, and is no longer circulated; therefore, the currency replacement will not reduce the purchasing power of an employee or a worker, especially after taking the salary in a stable currency.

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