Syria moves closer to a single exchange rate

Syria devalued its currency by 3 percent on July 15, the country's central bank announced.

The devaluation applies to the "neighboring countries rate," previously set at 43.5 Syrian pounds to the dollar and covering official trade deals along with Arab and international company transactions.

The rate now stands at 45.5 Syrian pounds to the dollar. The neighboring country rate is one of several applied in Syria, including a scarcely used 11.5 Syrian pound official rate, and a black market rate that has been stable at 49-51 Syrian Pounds for the last six years.

The bank said the devaluation is the latest in a series of government moves to unify exchange rates across foreign currencies.

"The adjustment came as a result of improvement in the monetary situation in the country and the stability in the value of the pound," the bank said.

"Several financial and monetary measures are currently being adopted to create real balances that would promote financial and monetary stability and activate the various economic activities and enhance the development process to higher levels," it added in the statement.

An economist said the devaluation was mainly instituted to increase the competitiveness of Syrian goods and help boost the country's trade.

"A single devaluation is not a big step by itself. It will not change a complete economic system," a leading Beirut economist said on July 15.

"The move will signal a serious intention to liberalize the currency if it is followed by more devaluation. But it takes some time to reverse a whole trend that encompasses the entire country," he added.

Last year, Syrians and expatriates were allowed to open unrestricted accounts in hard currencies in local banks.

In a move designed to lure foreign investment, the government extended a ten year tax and customs exemption to capital projects.