Middle East

Syria moves to curb forex flight amid protests

 DAMASCUS: Syria launched Wednesday a string of measures to curb the flight of foreign currency triggered by anti-regime protests by permitting for the first time savings in dollars and euros.
  
The measures come after Syria's economic prospects weakened, with the International Monetary Fund revising downward its growth rate, the local currency diving about 10 percent in the black market and the Damascus Stock Exchange plunging 20 percent in the past six weeks.
  
"From today, Syrians are permitted to open savings accounts in dollars and euros worth up to 120,000 dollars as long as the amount is blocked for at least six months," a director at the central bank told AFP.
  
The central bank also decided to increase the interest rate on savings in Syrian pounds by two percent to nine percent in a bid to "support the national currency."   

Syria, whose foreign exchange reserves are estimated at 17 billion dollars, also lowered the cash reserve ratio on bank deposits to five percent from 10 and since Monday cut retail dollar withdrawals to 5,000 from 10,000.
  
"This is to avoid speculation as customers were buying the dollar at the official rate of 47.5 pounds and sold it (in the black market) at 50 pounds," said the director.
  
A banker in Damascus said that during the past month, daily withdrawals have exceeded deposits, with retail customers storming bank teller machines.
  
Since the anti-regime protests erupted on March 15, Syrians have returned to their old habit of keeping their money at home, he said.
  
Syria has been gripped by violent protests against President Bashar al-Assad's autocratic rule in which more than 600 people have died and nearly 8,000 are either jailed or missing, human rights groups say.
  
The IMF, meanwhile, lowered Syria's economic growth rate to three percent from 5.5 for this year. It said if peace returns to the country, then in 2012 growth could rise to 5.1 percent.
  
The economic growth rate was revised downward largely due to a fall in income from tourism and the textiles industry.
  
An economics expert based in Damascus said if the protests continue, the 11th five-year plan worth 100 billion dollars which began this year could be affected.
  
"This plan is crucial if Syria wants to grow in the long term," he said, adding it would also "reduce the unemployment rate which is officially 11 percent, but in reality it is around 20 percent." 

 

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