The Central Bank of Syria (CBS) has denied all rumours about the government’s intentions to replace currently circulating Syrian currency with newly printed banknotes.

“The Central Bank has no intention to replace the current currency, and all allegations regarding printing new currency are part of the biased media campaign targeting Syria’s economy and banking sector,” state-owned daily Al-Thawra quoted an anonymous source at the CBS as saying on March 20.

Before this statement, most Syrian media had been reporting that the Syrian government was determined to print new banknotes for internal circulation only. Interpretations of this potential move varied.

 “Printing new banknotes will crack down on traders who are working abroad to remove the Syrian currency from circulation and strike a blow to the market,” President of the Jewelers’ Association George  Sargi told private daily Al-Watan on February 13. However, many other media outlets viewed the rumoured move as a sign of the disastrous collapse of the national economy.

Nevertheless, according to the daily, the CBS’s current stock of Syrian currency is sufficient, and there is no need to introduce more. “The state’s commitment to pay the salaries of its employees on time is the best proof for that,” the same source at CBS affirmed.

Meanwhile, the Syrian Pound has continued recovering value after falling to over 105 to the dollar on March 7. By the end of March, the exchange rate had rebounded to around SYP 70 per dollar on the licensed private foreign exchange market, which was within two pounds of the black market rate on March 26. The CBS has continued to trade the dollar at around SYP 60.

“The drop in the exchange rate of the Syrian Pound is caused by black market traders manipulating exchange rates to make exorbitant prices, and not by supply and demand,” Minister of Finance Mohammad al-Jleilati said in a televised statement on Syrian TV on March 10.

However, such an unprecedented rise affected the Syrian market badly. Traders in Damascus were struggling to re-price goods from one day to the next. “I didn’t know what to do,” said Muhammad, a 40-year-old businessman with a small electronic goods store. “I had to tell my staff not to sell anything for three days because I could not decide the prices.”

On January 11, Minister of Economy and Trade Mohammed Nidal al-Cha’ar said that the government’s priority would be to preserve the country’s foreign reserves. However, it was subsequently announced that the CBS would continue to intervene by pumping dollars into the market, though the size of each intervention was not announced. “The CBS intervenes according to the requirements of the market, which vary from day to day,” the source quoted by Al-Thawra said. On the second week of March alone, the volume of intervention was reported to have reached USD 10m, according to private TV channel Addounia.

“The Syrian Pound is facing twin pressures: the erroneous fiscal management of the increasing crisis by the government, and speculative traders who capitalise on the crisis to harvest brisk profits,” a manager in a private economic consulting firm, Hassan Ahmed, told Syria Today. However, he said, the most serious mistake was underestimating the psychological aspect of the market. “Although the Syrian government has worked hard to keep the Syrian currency stable, the delay in clarification and intervention in the market has negatively affected the pound,” he argued.