DAMASCUS, Oct. 17 (Xinhua) -- After 19 months of harsh economic sanctions on the country, Syria has assured its people that the pound is still solid and warned that stiff punitive measures would be applied on speculators.
The governor of the Central Bank of Syria, Adib Mayaleh, said during a recent Cabinet meeting that the central bank, since the beginning of the crisis in Syria, has favorably managed the exchange rate of the Syrian pound owing to the inflows of foreign exchange from abroad even though these flows have decreased as the country's hard currency resources have drained, especially tourism and some transfers.
Yet, he stressed, there are still some resources like exports done by the public and private sectors alike.
He noted that the bank must develop its decisions that regulates hard currency in order to preserve as much as possible an acceptable exchange rate of the pound that commensurate with the economic situation.
Mayaleh assured people that the price of the Syrian pound is still acceptable and that the official price is slightly less than 70 Syrian pounds (to one U.S. dollar) and may rise by one or two pounds at the black market, "but will soon return to normal within a short period."
He also emphasized that the country's reserve of foreign exchange is still enough to "resist this crisis," keep the stability of the Syrian pound in exchange of the dollar, and meet the needs of the commercial and non-commercial market.
Mayaleh denied rumors claiming that the bank has suspended its policy of interference in the process of buying and selling the dollar.
Financial sources said the bank has sold exchange companies and banks millions of dollars since the start of its policy of intervention that is continuing through permanent monitor of the market and the ongoing meetings between the central bank and the exchange companies and banks.
Less than a month ago and before the central bank's intervention, the Syrian pound sharply depreciated against the dollar. The sharp fall of the currency has stoked inflation by nearly 30 percent.
Economists believe that the current exchange rate is rational given the market speculations and the psychological element that cause panic to people at hard times.
Mayaleh said the policy of intervention still exists and the bank plays its role in accordance with definite banking procedures, denying allegations that the exchange companies had stopped selling hard currency to people.
His denial was also echoed by some exchange companies that have confirmed that they had stopped selling hard currency waiting for a decision to be issued soon by the central bank to define the terms of selling the dollar for the citizens.
According to the bulletin of the Central Bank of Syria, the dollar has broken a new record against the Syrian pound, recording 69.03 for sale and 68.62 for purchase, up from 68.78 for sale and 68.37 for purchase a day earlier.
Last week, people queued in front of some exchange companies in Damascus in order to get dollars at the price of 68.70 pounds, whose price has hit to 73.25 pounds for sale on the black market. However, selling dollars has stopped two days ago.
It was striking that the dollar rose on the black market and reached 74.25 pounds for sale and 73.75 pounds for buying, although the exchange companies were still selling the dollars and pumping it in the market.
The central bank has recently issued two decisions providing for selling hard currency of up to 10,000 dollars for citizens to non-commercial purposes, like medical treatment, and 12,000 dollars for students who are studying abroad in order to pay outstanding fees, in addition to the decision that allows students to buy 1,000 dollars a month.
It also allows citizens to buy hard currency of no more than 5, 000 dollars for saving but stipulates that the money should be deposited in the bank for a period of six months.
The bank is now selling hard currency for commercial purposes, but this is also conditional on submitting a prior customs certificate proving that the goods were legally imported.
Mayalieh warned that punitive measures would be taken against any bank or any exchange company that violates the exchange rate of the central bank.
The measures are considered necessary by financial experts contending that a stable pound is an indicator of the country's stability.