Assad Bans Use of Foreign Currencies in Attempt to Prop Up Syrian Pound

Credit: Banana Van Mod/wikimediaCredit: Banana Van Mod/wikimedia

In an effort to prop up the Syrian pound, which has not been doing so well since the beginning of the civil war, Assad has announced a ban on the use of foreign currencies in business transactions. According to government-run media, anyone caught using anything other than the Syrian pound for a business transaction faces a prison sentence and a fine.

From The New York Times:

SANA, the government-run news agency, said that people offering goods and services for foreign currencies without the government’s approval could be fined and sentenced to at least six months in jail. In cases involving deals valued at more than $5,000, the punishment could be up to 10 years of hard labor.

Syrians have grown increasingly desperate to move their money to foreign currencies as the civil war, now in its third year, ravages the economy. Currency exchange shops in central Damascus are often packed. Real estate and manufacturing deals are increasingly conducted in dollars. Even taxi drivers and others working in small, informal businesses often demand to be paid in foreign currencies.

Last month Steve Hanke, a Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at Johns Hopkins University and director of the Troubled Currencies Project at the Cato Institute wrote a blog post for Cato outlining not only the plummeting value of the Syrian pound but also the inflation of the currency.

The Assad regime has been receiving economic support from Russia and Iran throughout the civil war, but it has not been enough to stop Syria’s ongoing currency crisis that has followed the beginning of the brutal civil war and the Western sanctions it prompted.

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  • Cliché Bandit||

    Cue Simon Black article in 5...4...3...

  • Almanian!||

    So Syrian vacations should be way cheap then? I see the method to your madness, Assad, you sly fox!

  • Brian D||

    I wonder if they force you to pay the fine in Syrian pounds.

  • John||

    IF things continue to go badly in Syria, there is always Egypt. They still love us in Egypt right? The whole Muslim world loves us now because we elected the Kenyan village idiot President right?

    http://blogs.the-american-inte.....urn-on-us/

  • T||

    not only the plummeting value of the Syrian pound but also the inflation of the currency.

    Y'know, it's been a few years since b-school, but isn't a drop in value of the currency the same thing as inflation?

  • UnCivilServant||

    Not 100%. The 'value' of the currency is usually measured in exchange rates with other currencies, whereas inflation is a change in it's ability to buy at home. But yeah, the two are usually joined.

  • SugarFree||

    I wonder what the going rate for a wheelbarrow is in Syria right now.

  • Almanian!||

    A round or two of 7.76 or 9mm, I believe

  • robc||

    Destroying your currency is apparently the key to reelection.

    I see why Obama went down that path during his first term now.

  • Almanian!||

    USA! USA! USA!

    And the WORLD is following our lead! Greece, Ireland, Syria...

    USA! USA! USA!

  • robc||

    If Mugabe can get 61%, the leaders of those others can surely get 51%.

  • anon||

    That'll totally work. What could possibly go wrong?

  • PapayaSF||

    I thought the war was supposed to have turned in Assad's favor, but this doesn't seem like a good sign for him.

  • Warfario||

    Next step, impose price controls and then blame 'greed' when they don't work.

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