Syrian pound declined 100% in 2022
Enab Baladi – Jana al-Issa
The value of the Syrian pound declined against the US dollar by up to 100% during 2022. A historic low against the dollar coincided with the last six months, not recorded before.
During the month of December alone, the Syrian pound recorded a decline of more than 23% on a monthly basis and by nearly 10% on a weekly basis.
On 31 December 2022, the selling price of one dollar reached 7,150 Syrian pounds, while on the first day of the same year, it reached about 3,600 pounds.
The collapse of the pound by 100% within one year left a clear impact on the lives of residents in Syria in areas that depend on the pound as the main currency due to the almost daily price hikes that affected all commodities and basic materials.
On 2 January, the Syrian regime weakened its official exchange rate to 4,522 Syrian pounds to the dollar, a central bank statement said on Monday, while black market rates used for most economic activity sat around 6,500, according to Reuters.
The official rate was previously set at 3,015.
In the midst of these changes, there has been no increase in the income of most families. Last year, there was no increase in the monthly salary in the areas controlled by the regime, which remained at its value in Syrian pounds but decreased by 50% compared to its value against the dollar.
The value of the external remittances that a number of Syrian refugees used to send to their families to help them cover their expenses was affected as a result of the general living situation and the high rates of inflation in most countries of asylum, which forced some of them to reduce the amount of remittances they send monthly to their families.
A 50% salary decrease
The government of the Syrian regime did not respond to the sharp decline in the value of the pound with an improvement in the value of the salary. On the contrary, its value in 2022 decreased by 50% compared to the dollar.
Considering that the prices of most basic materials and commodities have doubled due to the dollar, this has directly affected the purchasing power of citizens.
The most recent salary increase was approved in December 2021, according to a presidential decree, which included a 30% increase in the salaries of workers and employees and a 25% increase in the salaries of civilian and military retirees.
According to the Salary Explorer website, which covers salary and wage scale numbers around the world, the average monthly salary in Syria during 2022 amounted to about 146,000 Syrian pounds, explaining that 50% of employees had an average salary of 146,000 pounds or less, while the other half earned more than 146,000 pounds.
According to the website, the minimum salary in Syria is about 37,000 Syrian pounds per month, while the highest salary is 663,000 Syrian pounds.
And by comparing the value of the average monthly salary of 146,000 pounds with the exchange rate of the dollar during the past year, the average salary in early January 2022 was equal to about 40 dollars, while its value decreased at the end of December 2022 to about 20.4 dollars.
The Minister of Finance, Kinan Yaghi, linked the increase in salaries to the revenues collected for the state treasury on the one hand and the improvement of the economic reality on the other hand. Statements reinforced by the numbers of the state’s general budget for the year 2023 and the mass of salaries and wages in it, which do not indicate a high possibility of an increase in the value of salaries.
For his part, Firas Shaabo, a doctor in financial and banking sciences, considered, in a previous interview with Enab Baladi, that residents in Syria need an increase of about 500% in salaries to be called an actual increase, and any increase of 20 or even 30% does not carry a major change in the lives of citizens.
No concrete action
The decline in the value of the pound during 2022 was not faced with tangible government moves that would curb this decline and the accompanying rise in material prices.
Economic researcher Zaki Mahshi sees this as an indication of the lack of financial and monetary tools to stop this deterioration, in addition to its inability to offer dollars in the markets, as it has completely depleted foreign currency reserves, according to what he said in a previous interview with Enab Baladi.
The exchange rate, in light of the current circumstances in Syria, is linked to several combined economic factors that lead to the depreciation of the pound.
These include the lack of production, the decline in the growth of the domestic product, and the dependence on foreign markets, in addition to the large deficit in the trade balance, the balance of payments, and the general budget of the state, in addition to the flight of foreign investments, and the existence of a vast black market through which the currency is exchanged.
According to a report issued by the Jusoor for Studies Center in early 2021, the Syrian pound lacks the limits of resistance necessary to defend its stability, and it is difficult for it to withstand any shock, no matter how small, which confirms that it is vulnerable to a rapid decline.
The impact of political and economic shifts in the exchange rate of the pound is often in the form of clear waves of rise, that is, a decrease in the value of the pound, which makes it difficult to determine the levels that it can achieve, the report concluded.
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