Syrian Central Bank curbs foreign currency sales

BEIRUT: Syria’s Central Bank has told banks and money exchanges to limit sales of foreign currency, the state news agency SANA said Monday, in the government’s latest step to stem financial damage from five months of popular unrest.

The Central Bank commission responsible for combating money laundering and terrorism financing said they should only offer foreign currency when there was “economic justification” for the transaction.

Sales of foreign currency to Syrians traveling abroad should be made one day before departure, with a maximum of two transactions per year. Banks should obtain a commitment that any money not used be changed back within a week, SANA said.

The Central Bank commission also limited the amount of foreign exchange Syrians could buy – except where there was economic justification – to the equivalent of $1,000 per month, with a maximum of three transactions per year.

Syrian officials say the Central Bank reserves stood at around $18 billion before the protests against President Bashar Assad erupted in March. But regional bankers say the reserves have been diminishing by around $70-$80 million a week as the bank has sought to support the Syrian pound exchange rate.

The official exchange rate stands at 47.4 pounds to the U.S. dollar, but dollars are being exchanged unofficially at 51 pounds to the dollar and above.

Some Syrian opposition figures claimed earlier that close to $20 billion of deposits fled from Syria to Lebanon, an allegation strongly denied by Lebanese banks and financial authorities.

Bank sources told The Daily Star that it is nearly impossible for Lebanese banks to absorb $20 billion in one shot, stressing that the average growth of assets in Lebanon is less than 8 percent.

There are seven Lebanese banks operating in Syria at present, although most of the shares in these banks are held by the Syrian private sector.

A recent report said that the assets of Lebanese banks operating in Syria fell by 8.4 percent since the crisis started at the beginning of this year.

The financial results issued by the affiliates of seven Lebanese banks operating in Syria show their total assets reached 359 billion Syrian pounds ($7.6 billion) at the end of June 2011, an 8.4 percent drop from end-2010.

The decline was due to an average drop of 16 percent in the assets of Banque BEMO Saudi Fransi, Bank Audi Syria and Bank of Syria & Overseas, the three largest private commercial banks by assets.

The banks’ loans totaled 145 billion Syrian pounds at end-June, a drop of 2.6 percent from the end of 2010.

The loans’ decline was mainly caused by an average contraction of 17.3 percent in the lending of Bank Audi Syria and Bank of Syria & Overseas in the first half of the year.

Also, the banks’ customer deposits reached 280 billion Syrian pounds at the end of June, regressing by 16 percent in the first half of the year.

The drop was due to an average contraction of 21.5 percent in the deposits of Banque BEMO Saudi Fransi, Bank Audi Syria and Bank of Syria & Overseas. Banque BEMO Saudi Fransi’s deposits contracted by 23.9 percent year-to-June, and posted the steepest drop among the affiliates of Lebanese banks in Syria in the covered period. 

A version of this article appeared in the print edition of The Daily Star on August 17, 2011, on page 4.




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