Syria leans on exchange bureaus to save plummeting pound

Damascus: Syria's central bank on Tuesday ordered exchange bureaus to buy millions of dollars from it, state media said, to boost a currency at its lowest value in the five-year war.

"The central bank ordered large exchange bureaus to buy $1 million and smaller bureaus to buy $100,000," the SANA official news agency reported.

"Those that do not comply will be closed."

The official exchange rate jumped by more than 20 percent to 620 pounds against the dollar from Monday to Tuesday, following the rate on the black market.

"The central bank obliges exchange bureaus to sell dollars for 620 Syrian dollars without commission," SANA added.

Jihad Yazigi, head of The Syria Report, said the measure could in part be explained by "the rumour that it would no longer do so because of a lack of reserves".

Last month the World Bank said Syria's foreign currency reserves had dropped to $700 million at the end of last year from $20 billion at the start of the war in 2011.

"The measure will temporarily calm down the situation but the exchange rate will increase if the central bank doesn't regularly water the market with green bills," Yazigi said.

"It's an injection of only several millions of dollars because there are only five big exchange bureaus in Damascus."

In and around the capital Damascus, residents and business owners have been complaining of soaring prices.

The manager of a grocery store in Damascus province, who gave his name only as George, said products were so expensive that he no longer bought them from distributors.

"I'm waiting for the stock exchange to calm down so that we can price things reasonably," he said.

A businessman who asked to remain anonymous said he had closed his factory, north of Damascus.

"Between buying what I need for production and selling the product, the pound has lost value and I make a loss," he said.

Syrians have vented their anger online.

On Facebook page Damascus Now -- one with more than 800,000 followers -- a contributor blamed central bank governor Adib Mayaleh.

One follower agreed: "Either you are able to carry out your duties or you resign."

But another web user defended him.

"If Adib were the cause of the pound's devaluation if would be an easy problem to fix. But we're at war under economic embargo and all sources of foreign currency -- whether from tourism or exports -- have dried up," he wrote.

"The only option is to end the war."

As well as devastating the economy, Syria's conflict has killed more than 270,000 people and displaced millions.

The conflict started in 2011 with the brutal repression of anti-government protests.