Finance

Earlier this month, Iranian officials confirmed that they will soon launch several investments in Syria’s telecommunications, banking, and insurance sectors. 

The value of the dollar in the Syrian foreign exchange market has surged in recent weeks, rising by some 38 percent month-on-month to SYP 12,500 on July 25.

A Kuwaiti institutional investor is acquiring a 1 percent stake in a Syrian bank, a very rare case of foreign investment in a local bank. 

Last year saw a significant increase in the main indices and market capitalisation of the Damascus Securities Exchange but decreased trade value and volume.

OFAC has listed two Syrian foreign exchange companies as part of its Caesar Act sanctions mechanism.

The Syrian pound has fallen to another historical low after crossing the SYP 8,000 threshold against the dollar on the black market. 

The Autonomous Administration of North and East Syria has issued a law regulating the operations of foreign exchange dealers as the sector gains increasing importance. The law’s timing is a reminder of the importance of remittances for the Syrian economy and of foreign exchange dealers at a time western sanctions are restricting the operations of local banks.

The balance sheet of Syrian private sector banks grew last year, as deposits by public sector entities surged, according to official financial reports by the banks. The influence of the presidential palace can be seen in the large lending portfolio of two banks.

The value of misappropriated public funds in Syrian state institutions increased by 409 percent last year, according to official data.

The Central Bank of Syria has authorised local banks to provide loans in foreign currency in an attempt to encourage lending and investment. Although its scope is relatively limited and only affects export-generating companies, the decision encourages dollarisation, that is, a shift towards economic transactions paid and earned in dollars, which is something that Syrian authorities have tried to avoid until now.

An American bank was fined nearly USD 100 million for violating Syria, Iran, and Sudan sanctions regulations. 

Syria’s latest commercial private sector bank, the National Islamic Bank, has published its opening balance sheet and appointed a CEO as it moves towards launching operations.

Cham Capital, one of the seven brokerage firms still operating in the Damascus Securities Exchange, has recently announced that it was dissolving. The closure of the Makhlouf-linked company had been expected for two years.

Two state-owned banks connected their ATM networks with other state and private banks as part of the government’s larger plan to automate services.

The dollar has crossed the 6,000-pound level in the Syrian foreign exchange market for the first time on record, on the back of rising oil shortages.

Despite severe restrictions to its financial transactions with the outside world, Syria is unlikely to use the Russian alternative to the SWIFT system anytime soon.

Although the microfinance sector in North Syria remains small, several microfinance institutions and lenders continue to issue new projects and programmes to reduce the local population’s dependency on humanitarian aid.

The Hijaz Railways Organisation recently announced that it generated thousands of dollars in cash and millions of dollars in shares from its investments in Solidere, the company established by the late Lebanese Prime Minister Rafic Al-Hariri in 1994 to rebuild and develop Beirut after the Lebanese civil war.

On October 11, the U.S. Department of Treasury’s Office of Foreign Assets Control and Financial Crimes Enforcement Network levied the largest-ever penalty against a cryptocurrency exchange company for violating several sanctions programmes, including that of Syria. The action raises concerns about the growing use of virtual currency among sanctioned groups and individuals who seek to bypass sanctions and finance illegal operations, especially in Hayat Tahrir Al-Sham territories, where two cryptocurrency companies exist. 

Last week, the Syrian government sold SYP 72.50 billion worth of treasury bonds as part of its efforts to raise money to fund its deficit.