Syrian markets saw a fresh rise in the exchange rate of the dollar against the lira on Sunday morning, reaching about 12,500 lira, adding further pressure on consumer goods prices and increasing the burden of living costs on families.
This increase comes after a period of relative stability during which the dollar remained between 11,000 and 11,500 lira, before beginning a gradual rise after Eid al-Fitr. Over the past week, it recorded an increase of nearly 5 percent compared with the previous week’s prices, while the official exchange rate at the central bank remained around 11,100 lira per dollar.
Immediate impact on the markets
In local markets, traders were quick to pass this rise on to shop shelves, as the prices of basic goods increased noticeably, prompting families to cut back their purchases and focus only on essential needs.
For example, vegetable oil prices rose by about 5 percent this morning, while detergent prices increased by 10 percent. Rice and sugar also rose by 10 percent, while coffee increased by 9.1 percent, according to the website “Snack Souri,” citing a shop owner.
He added that most customers now buy only the smallest quantities or limit themselves to basic items, as every increase in the dollar’s price has become a new burden on the family’s daily expenses.
A new price every day
A wholesale trader said that for the past week, the market has been seeing “a new price every day,” explaining that the companies he deals with, whether in food products or detergents, are pricing their products today based on a dollar rate of 12,550 lira, after it was only 12,500 lira yesterday.
He added that the problem does not stop at the current price of goods, but extends even to debts, as companies deal in dollars even for credit. This means that if a trader buys goods worth 100 dollars on credit today, he will pay next week 100 dollars or its equivalent in Syrian lira according to the new exchange rate at the time of settlement. He stressed that this compels him to keep raising prices continuously, especially since the prices of most goods have risen over the past few days by around 9 percent on average.
In this regard, economic expert George Khazzam said in a Facebook post that the slow rise in the exchange rate of the dollar against the Syrian lira reflects a real market situation, compared with the rapid increases created by temporary speculative operations carried out by some money changers through controlling the quantities of lira or dollars on offer in order to make quick profits, without any basis in increased actual production or real economic activity. He explained that these rapid fluctuations are inherently illusory and reflect nothing but speculative intervention.
Import policies and curbing production
Khazzam pointed out that the continuation of the Ministry of Economy’s policy, which he described as the policy of a “Ministry of Imports and Factory Closures,” and which grants excessive protection to imports through low customs duties, makes every rise in the dollar’s price a real reflection of supply-and-demand balances, while every drop in the price remains temporary and illusory because it is not based on any actual economic improvement.
He added that the continuation of these economic policies based on supporting imports and undermining industrial and agricultural production, alongside the central bank’s restrictions on withdrawals and the draining of liquidity, will leave future governments facing a severe economic and financial crisis.
He warned that the potential consequences of these policies include inflation, the collapse of purchasing power, and the state being forced to issue a new currency while removing an additional zero from the lira, in an attempt to correct the deteriorating financial situation.
What is the solution?
Khazzam said that this step would be linked to the liquidation of public- and private-sector factories, rising unemployment rates, and increasing stagnation and poverty, in addition to poor resource management and continued support for imports at the expense of local production.
He concluded by stressing that the solution requires adopting new, scientific, and logical economic policies aimed at strengthening local industrial and agricultural production and restoring balance to the national economy in a way that ensures exchange-rate stability and achieves sustainable long-term growth.
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