News that the Syrian pound had hit a record low ($1=920 LS) was a reminder of how futile it is for any one country to wall itself off from the world because geography will find you.
In Syria’s case, neighbouring Lebanon’s financial and political crisis is the reason for the sharp drop in its currency’s value. For, Lebanon is Syria’s economic lung. In the nine years that Syria has been ravaged by civil war, many Syrians have deposited their money in Lebanese banks.
But it’s been months since Lebanon has been roiled by political unrest, which has led the country’s banks to impose capital controls, in order to prevent the flight of large sums of money.
That, however, doesn’t explain the falling value of the Syrian pound. When conflict erupted in Syria in March 2011, one dollar was valued at 47 LS. Today, even the official rate is 10 times as much.
Perhaps it’s to do with the effect of western sanctions (yes, they’re still there!) although I’m not convinced that’s the main thing. Perhaps it’s because Syrians working in Lebanon aren’t able to remit as much money as before. Whatever the reason, the effects of inter-connectedness can’t be denied.