Syria's pound has continued to slide against the greenback, losing as much as 166 percent of its value in the black market since the outbreak of a rebellion against the regime of President Bashar Al Assad two years ago, while the currency is trading at 81 percent less to the US dollar, according to the official rates of the country's central bank.
The pound is trading at a rate of about 84.6 to the US dollar according to central bank data, while in the black market the rate has reached as high as 125. The pound used to trade at about 47 to the dollar before the uprising in 2011.
"The fierce war against Syria and its people is the primary reason behind the decline in the exchange rate," Central Bank Governor Adib Mayaleh said in an interview with state-run television. The central bank will "take several measures to protect the pound and will issue certificates of deposits with high interest rates," to prop up the currency, he added.
Mayaleh said Russia and China have helped support the Syrian economy and a $1bn credit line from Iran has helped back the exchange rate regime of the pound as the two-year rebellion against President Bashar Al Assad takes its toll on the country's industries and investment falls, while sanctions limit export capacity.
Syria's economy will shrink by about 15 percent this year compared to a contraction of 20 percent in 2012 and 6 percent in 2011, the Institute of International Finance (IIF) said in a report earlier this month.
The economy's nominal size is projected to drop to US$27bn in 2013 compared with US$57.5bn in 2010 prior to the revolt against the Syrian leader, as tourism receipts and foreign direct investment dry up, the IIF said.
Tourism receipts accounted for around 11 percent of gross domestic product in 2010, while FDI in 2010 was at US$1.5bn.
The country's fiscal deficit, financed mostly by domestic banks, is forecast to widen to 13 percent of GDP in 2013 compared with 16.3 percent last year as the government increases spending and tax revenue and oil receipts decline, the IIF said.
Syria's foreign currency reserves are projected to plunge to US$2.1bn, enough to cover one month of imports, compared with US$5.6bn at the end of last year, the IIF said. The central bank had about US$18bn in foreign currency reserves prior to the outbreak of violence in the southern part of the country.
Power outages over the two-year uprising against the government of Syrian leader Bashar Al Assad have cost the state SYP218bn (US$2.7bn), as a result of "acts of sabotage" and "terrorism" electricity minister Imad Khamis said last month.
The construction of two power plant projects has been delayed due to lack of funding of about €420m from the European Investment Bank, Khamis was cited as saying by official state SANA news agency.
About 70,000 people have been killed since the start of a two-year conflict while 600,000 have fled the country to neighbouring Turkey, Jordan and Lebanon, according to the United Nations.
Assad's government has blamed the violence in the country on extremists and a foreign conspiracy.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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