(Source: Info-Prod Research (Middle East))
As you may know, the use of the Syrian pound has only started in
1948 after the secession of Bank of Syria and Lebanon, which was
providing a single common currency for both countries. Although the
Syrian currency has achieved great success in recent years under the
reign of Bashar al-Assad, things are going for the worst. The reason
is known which, of course, the protest for reforms. The
unprecedented protests on Syria showed negative effects on the local
currency. Indeed, the crisis increased demand for the dollar,
weakened the local currency and pushed stock indexes into the red
side. The Syrian investors fear from embarking on investment in
Syria and try to put all their investment projects on hold for the
moment. Growth rates, in Syria, attained the 5% level, but these
rates are on their way down because it was driven by consumption and
real estate sector. It is noted that the real estate market in Syria
is suffering from depression because of the unprecedented rise in
prices. Experts point out that businessmen in Syria are reluctant to
expand their investments. International investors have stopped
pumping their funds until the political picture becomes clearer. The
Syrians are now buying foreign currencies in a way that threatens
the Syrian economy, and the demand for the Syrian pound in other
Arab countries is much less in the last period. Many Syrians and
foreigners are now withdrawing their money from Syrian banks.
Nevertheless, according to Dr. Dureid Dergham, General Director the
largest Syrian bank network, the withdrawals from his bank since the
start of the events did not exceed 2 to 3% (equivalent to 7 to 8
billion pounds) of deposits which is considered normal and that
there is no reason for concern, stressing that an important part of
the withdrawals were by traders to finance foreign trades, or to
secure the lack of liquidity under the delay of importers in markets
such as Egypt and Libya to send their payments because of the events
in there. Dergham denied the lack of liquidity, and assured that
there is a good supply of cash in the markets. Indeed, he said that
the banking system in Syria is able to meet all the withdrawals, and
that the central bank can meet any requests, either by banks,
companies, or citizens. Dergham warned of a repeat of what happened
in 2005, when everyone bought the dollar after the drop of the
Syrian pound by 12%, which returned to normal later on. Therefore,
Dergham called for not following the purchase of foreign currency
trend and stressed that this may have severe damage. On the other
hand, as far as the market index is concerned, this last fell by -
16.29 points on Monday's session from the previous meeting, to close
at 1,340.58, at a rate of -1.20%, compared with Thursday's meeting
when the index dropped by 0.90 points from the Wednesday session ,
to close at 1,356.87, by a negative change of 0.07%, compared with
the previous meeting when the index dropped by 17.27 points, to
close at 1,357.77, by a negative change of 1.26%. (source:
www.yallafinance.com)
Originally published by Info-Prod Strategic Business Information.
(c) 2011 Info-Prod Research (Middle East). Provided by ProQuest LLC. All rights Reserved.
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