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