DAMASCUS, April 19 (Xinhua) -- Economists have raised questions about the way the Syrian government has been adopting to manage the country's economy after more than a year of daunting pressures. Others have speculated that the government is depleting its reserves of hard currency and gold.
Governor of the Central Bank of Syria Adib Mayalah denied as " baseless" some foreign media reports that the Central Bank of Syria plans to put for sale some of the gold reserves, saying such news aim to "discredit the Syrian economy and stir up public opinion."
In a recent statement to private al-Watan newspaper, He stressed that the bank has abundance of hard currency, and there is no need to sell gold reserves.
President of the Goldsmith Association George Sargi also dismissed the report as "nonsense," adding that the central bank has large quantities of gold that were confiscated over the past years.
In a statement published by local media, Sargi pointed out that the central bank might have the intention to sell some of those seizures, adding that the bank didn't sell gold since 20 years ago.
He, however, said that it's "unwarranted" for the bank to sell gold now "because it is one of the last ways it should resort to," stressing that Syria is not in need to do that at this time " because the Syrian economy is still strong and we have adequate reserves of foreign exchange."
He indicated that the goldsmith association works jointly with a committee from the Central Bank to mint the bank's gold into 24 carat alloys in order to add them to the gold reserve in the state treasury.
"The Syrian economy is solid and the pound is in a very good condition, and gold is one of the most important pillars that have buoyed the national currency," he said.
Foreign media reports said the Central Bank mulls selling its gold reserves to face the shortage in foreign exchange reserves caused by the recently imposed economic sanctions on Syria.
By contrast, a report released few days ago by the World Gold Council suggested that the Central Bank of Syria holds 25.8 tons of gold, each ton is equal to 32,150 ounces. This amount of gold reserves has been unchanged since 2008. Syria, with this amount of gold, was ranked the seventh in the Arab world and the 55th on the world record on the basis of the World Gold Council's classification of countries in accordance of their possession of the yellow metal.
On the other hand, the high price of gold in 2012 has positively contributed in raising the proportion of the gold in the official Syrian reserves to 8.1 percent.
Local media said total value of the country's reserves of hard currency and gold reached 18.14 billion U.S. dollars till the end of February 2012, adding that gold reserves stood at 1.46935 billion dollars, and the reserve for foreign exchange was 16.67 billion dollars.
Gold posed 7 percent of Syria's reserves at the end of the second quarter of 2011, up from 5.9 percent at the end of the first quarter.
By the end of 2011, Syria's gold reserves accounted to 2.2 percent of the Arab's gold reserves, and 0.08 percent of global reserves.
However, those figures do not bode well on ground.
According to the government-owned Tishrin newspaper, the Syrian government, in a letter addressed to some of its ministries, warned against what it called a "mass poverty" in the country and affirmed the need to complete the process of economic reform and development of social policies.
Tishrin said the government has recommended that the state should practice its role in directing economic activity with strengthening the private sector, developing the various sectors of the national economy, decreasing dependence on the revenues of oil resources, and working on building dynamic private sector that should attempt to prevent the transformation of the economic reform into mass poverty.
The letter also proposed to activate the positive intervention of the state in controlling prices and linking them to wages, with special emphasis on the continuous monitoring of the market conditions to prevent any bottlenecks or crises in the local markets, as well as to stop financing of unnecessary imports to preserve foreign exchange.
French diplomatic sources said recently that Western sanctions on Syria led to a decline in foreign exchange reserves, in addition to a retreat in its oil production by 30 percent, reducing thus the government's revenue by 400 million euros (520 million dollars) a month.
Syria has estimated reserves of foreign exchange of about 17 billion dollars before the outbreak of protests over a year ago.
The European Union and the United States have levied a broad list of sanctions on Syria, which included banning the import of oil from Damascus, a freeze of assets and travel ban.
Prior to the imposition of EU sanctions, Syria was selling 90 percent of its oil to Europe. With the closure of that market, Syria's oil production fell by 30 percent.
The sanctions led to a sharp deterioration of the economy and triggered off hyperinflation, as well as a sharp decline in the value of the currency.
The EU has said it's casting around to impose additional economic sanctions on Syria to further paralyze the Syrian economy and tighten the screw around the leadership.