Syria floats new bank note amid soaring inflation

Damascus: A new, 5000 Syrian lira banknote has gone into circulation, the largest denomination in the country reeling from a decade of conflict and a crippling economic crisis.

The new 5000 Syrian Lira banknote, the largest denomination in the country reeling from 10 years of conflict and a crippling economic crisis. Credit:SANA/AP

Syria’s currency has been on a downward spiral since the conflict began in 2011. Trading that year at 47 liras to the US dollar. It’s now officially up to trading at 1250 liras to the dollar. On the black market, the US dollar is trading at nearly double the official value.

The currency crash has sent prices of food and basic goods soaring.

Syria’s Central Bureau of Statistics reported an average inflation rate of 200 per cent in 2020 compared to 2019, with goods inflation reaching 300 per cent. The prices of key food items, such as lentils and vegetable oil, have increased by around 15 per cent.

The economic hardship has been made worse by the pandemic restrictions, increased Western sanctions on the Syrian government and its allies for their role in the war, and years of corruption and mismanagement.

The United Nations estimates that nearly 80 per cent of Syrians live under the poverty line. In recent months, fuel and wheat have been in short supply, driving the government to reduce subsidies and ration resources.

The Central Bank said the new note was issued “to meet the need of the market, facilitate cash transactions and reduce their costs”.

The newly-designed banknote bears on one side a photo of a soldier saluting the Syrian flag. The 2000 lira note, introduced in 2017, bears a photo of Syrian President Bashar al-Assad.

AP

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