Recent comments by the governor of the Central Bank of Syria about a possible improvement in the Syrian pound have raised new questions about whether such gains—if they materialize—can be sustained and whether they will translate into better living conditions for Syrians. These questions come amid persistent obstacles to economic recovery and continued volatility in exchange rates following the fall of the former regime.

Economists and analysts stress that any genuine strengthening of the Syrian pound cannot be achieved through currency replacement alone. Instead, it depends on broader structural improvements, including revitalizing productive sectors, supporting manufacturing and small and medium-sized enterprises, and attracting foreign investment.

A Pound “Likely to Improve”

The Central Bank governor recently said the Syrian pound is “likely to improve” in the coming period, citing rising production and tighter regulation of imports. In an interview with Al-Ikhbariya TV last Saturday, he described current economic indicators as “promising.”

He also announced that 56% of the money supply has been replaced so far, following an extension of the exchange period to give citizens more time. The replacement process is being conducted exclusively through banks to ensure transparency and oversight. Plans are also underway to expand exchange centers in Hasakah and Raqqa to help stabilize the exchange rate.

Persistent Volatility

The Syrian pound has fluctuated sharply since the fall of the former regime, driven largely by political and security developments—and at times by media narratives that fuel swings between optimism and fear.

Between late 2024 and early 2025, the pound traded between SYP 10,000 and SYP 11,000 to the dollar. It later weakened again due to global crises, the onset of the war, and the introduction of the new currency. Since early 2026, the rate has exceeded SYP 13,000 to the dollar.

Economic researcher Adham Qudaimati told Syria TV’s website that such fluctuations are “natural,” especially as large quantities of old currency held in savings or reserves re-enter the market during the replacement process.

“The pound has experienced fluctuations throughout the replacement phase, and the price differences are not substantial,” he said. “We will not see stability until the process is fully completed. The pound will continue to fluctuate and may reach SYP 15,000 to the dollar by the end of the replacement period.”

Will the Central Bank’s Measures Work?

Currency replacement is a technical and regulatory step aimed at easing daily transactions by removing two zeros from the old banknotes. It also seeks to eliminate symbols of the Assad era by destroying notes bearing the images of the former president and his father, while allowing authorities to verify the true size of the money supply.

Political and economic researcher Mohammed Zakoun Kouka told Syria TV’s website that replacing the currency helps reduce the volume of cash in circulation and facilitates transactions, but it does not constitute a comprehensive economic reform plan.

Such a plan, he said, would require foreign deposits or “loans” from friendly countries—something the Syrian government has not accepted—as well as foreign investment, regional trade, improved production across key sectors, and updated legislation.

“The issue today is not the exchange rate itself or its fluctuations,” Kouka said. “The priority is stabilizing the rate and preventing constant volatility or major jumps.”

Managed Float or Implicit Policy Shift?

The Central Bank’s broader approach appears to resemble a “managed float,” allowing the pound to move within a flexible range based on supply and demand while preventing severe drops in value.

Under this approach, the daily exchange rate is largely determined by market forces, with the Central Bank intervening when necessary to maintain stability. Economic researcher Abdul Azim Al-Mughrabil told Syria TV’s website that the current policy is effectively a managed float, especially since the currency replacement process is still underway.

“There are clear signs of a managed float,” he said, pointing to measures such as tightening liquidity, setting daily withdrawal limits, resuming trading on the Damascus Securities Exchange, regulating cryptocurrency activity, and opening the Damascus foreign exchange and gold market.

Qudaimati noted that a full transition to market-based pricing may be possible once the Central Bank has sufficient tools to manage liquidity. The governor has previously signaled a shift toward the “market rate” while resisting speculative pressure on the pound. He emphasized that the managed float is temporary and tied specifically to the currency replacement phase.

As for injecting foreign currency into the market, Qudaimati said: “The Central Bank does not need to do so because the dollar is already present in sufficient quantities.”

Are “Indicators” Enough for Citizens?

Replacing the old currency has had a psychological impact on Syrians, given its association with the Assad era. It has also made daily transactions easier by reducing the volume of cash people must carry. But the key question remains: have living conditions improved nearly 18 months after the regime’s fall?

Qudaimati argues that any real improvement will depend on broader economic changes that follow the completion of the currency replacement process—such as achieving industrial self-sufficiency, attracting foreign investment, and fully reintegrating the banking sector into the economy.

“It is not possible to assess the pound’s prospects solely through the exchange rate,” he said. “But there will be real opportunities for improvement in the coming period.”

Al-Mughrabil, however, cautioned that improved monetary indicators alone are not enough for citizens to feel relief.

“The Syrian market passes on price increases quickly but transmits improvements very slowly,” he said. “A tangible impact requires a period of exchange-rate stability, smoother payment and import chains, and reduced pressure from energy, transport, and the effects of the war. Promising indicators matter, but they only become part of daily life once they turn into sustained stability.”

 

This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.