Syria new banks decisions as currency face pressure
Syria, Politics, 11/17/2005

The cabinet has adopted a series of important financial and banking decisions as part of reform, and to deal with pressure on the Syrian Pound under current circumstances.

The decisions provide that the state will continue to fund trade transactions though an effective organization of funding imports by means of credit cards. These new decisions apply to a very wide range of goods and all accredited banks in Syria, not only the state-owned Commercial Bank of Syria.

The new mechanism depends on simplified procedures through the banking system to provide necessary funding for industrialists and businessmen, and at the same time prevents manipulation into the mechanism of financing trade transactions or speculations against the Syrian Pound exchange rate.

The decisions was announced overnight in a press conference by Deputy Premier for Economic Affairs Abdulalh al-Dardari, Central Bank Governor Adib Mayyaleh, Director General of the Commercial Bank of Syria Dureid Dergham, Chairman of the Federation of Chambers of Commerce Dr. Rateb al-Shallah and Chairman of Damascus Chamber of Industry Imad Ghrawati.

The new regulations allow accredited banks in the country to issue Deposit Certificates for general circulation paying 9 percent for one year, 9,5 % for two years and 10 % for three years provided the amount is SP 500,000 up to SP 50 millions.

For the first time in Syria, banknotes were allowed to be used in banking transfers within certain limits, and regulations related to money laundering and fighting terrorism financing.

Dardrai told reporters in the press conference that there are other procedures on the way in terms of economic and monetary reforms to fend off any pressures targeting the national currency.

He stressed that all economic elements, including foreign exchange reserves and the balance of payments as well as the movement of local and foreign investments, point to the strength of the national currency and economy and their ability to confront any challenges and difficulties.

He called on the citizens to be confident of the strength of the Syrian Pound and economy, describing it as one of the strongest economies in the Middle East as testified by the World Bank.

Dardari pointed out that there is no need for people to feel concerned over the situation of the Syrian Pound as such concerns are unjustified and baseless.

He indicated that the rush by some people with little banking deposits to buy dollars, driven by false allegations about the Syrian economy was behind the recent pressure on the Syrian Pound. He added that these people will lose some of their money because the dollar will soon return to its natural levels of exchange rate as this process is governed by the mechanism of supply and demand.

Dardari said that "Syria has opted for steadfastness and resistance politically...it also opted for this thing economically where the government is preparing, as any other government, for all possibilities and options despite its confidence that its monetary surplus and balance of payments as well as its geographical site make a siege on the country impossible."

For his part, Mayyaleh said Syria can confront most difficult scenarios, pointing out that the economic and financial policies seeks to gradually finance all imports within the Syrian banking sector which has become very flexible.

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