Foreign Currency Reserves at Syrian Central Bank depleted

[yota691]

Foreign Currency Reserves at Syrian Central Bank depleted

The Syrian Pound (SP) lost further ground to the dollar on Tuesdaywith reports from Syria that the greenback traded at 71 SP, while daily financialtransactions showed unwillingness or inability of the Syrian Central Bank topump dollars into the Syrian market to preserve the SP’s value.

In mid march, before the outbreak of the Syrian Revolution againstthe regime of President Bashar Assad, the dollar stood at 45 SP.

Meanwhile, sources from the Iraq Central Bank (ICB) also reported that the Iraqi Dinar is under market pressure forcing the ICB to pump foreigncurrency into the Iraqi market to preserbe its value.

Iraqi sourcesreasoned that Syrians and Iranians are straining the Iraqi currency in theirquest for US dollars. Treaties between Iraq and Syria, on one hand, and Iraqand Iran, on the other, allow for the trade of local currencies. Syrians areswapping their free falling pounds, the Lira, with Iraqi dinars. They then swaptheir dinars with dollars that they take back home, where greenbacks are rareand are in high demand.

Iranians are doing the same by using the Iraqi dinar as anintermediary currency between their Riyal and the dollar. The end result is theaccumulation of Syrian Liras and Iranian Riyals at the vaults of Iraq’s CentralBank, which has been losing major chunks of its Foreign Currency (FX) Reservesover the past few weeks.

The Iraqigovernment is in a better position to defend its Dinar thanks to foreigncurrency revenue from the daily sale of 2.2 million oil barrels. TheSyrian and Iranian governments, however, find it hard to put their hands onforeign currency. They come to Baghdad looking for dollar and in the meantimeput strain on the Iraqi Central Bank and its Dinar. Yet, such a measure willnot be enough to salvage the hyper inflation hitting Syria, in the short term,and Iran, in the medium and long terms.

Predictions haveit that the Syrian Pound will lose further ground to the dollar, which isexpected to stand at 90 SP in the coming few weeks. The 90 SP marks double theprice for the dollar before the outbreak of the revolution in mid-March. Thismeans that a Syrian employee whose salary is $1000 dollars a month (45,000 SP),will be taking home half the amount as his same salary becomesthe equivalent of $500 when the dollar hits the 90 SP mark.

During themid-80s, the Lebanese experienced similar hyperinflation. The dollar shot upfrom 3 Lebanese Liras in 1982 to 2,200 in 1992. The Lira never recovered andthe dollar trades at around 1,500 Lebanese Liras today, except that thesuccessive governments eventually managed to readjust to the new Lebanese Lira’svalue.

In Syria, theCentral Bank looks to have run out of FX reserves and is unable to defend its nationalcurrency. The value of the Syrian Lira is now up to market forces, and these –given Syria’s unrest – are not expected to act in favor of keeping the Syrian Lirastrong.

http://scrollpost.com/blog/2012/01/17/foreign-currency-reserves-at-syrian

[unirod]

While I'm not a currency expert. Is this article telling us that Syria and Iran are trading IQD for USD?

[yota691]

While I'm not a currency expert. Is this article telling us that Syria and Iran are trading IQD for USD?

I believe you might be right, with all these big auctions, I feel they have something in common. Sanctions on Iran an Syria

Edited January 18, 2012 by yota691

[Stryker365]

I believe you might be right, with all these big auctions, I feel they have something in common. Sanctions on Iran an Syria

The plot thickens boys and girls..........more dinar making its way back home to the CBI and no its not going back out.......and no I don't have a link.........and no I don't have proof.......just thought I'd stop the questions from the dark side of the room.....

More power to the believers............I got to stop the coffee...way to much this morning!!!

[Papster]

they are needing the usd to prop up the value of their currency............selling their dinar for usd.........indeed..............pressure...........GO DINAR

[Abarvets]

Thanks for the article Yota!

[zigmeister]

They are killing one bird(two birds) with one stone it appears.

[LEXICON]

They are killing one bird(two birds) with one stone it appears.

As my wife says.." getting two birds stoned at once"

[zigmeister]

As my wife says.." getting two birds stoned at once"

[yota691]

The plot thickens boys and girls..........more dinar making its way back home to the CBI and no its not going back out.......and no I don't have a link.........and no I don't have proof.......just thought I'd stop the questions from the dark side of the room.....

More power to the believers............I got to stop the coffee...way to much this morning!!!

Stryker I got a ideal, if this fall through we can write a book, give all DV members part of the Profit. The Life of a Dinarian.