Syria is set to collaborate with the UAE and Germany to produce a newly designed currency, moving away from its previous partnership with Russia. This decision highlights the improving relations between Syria and various Gulf and Western nations, particularly as evolving circumstances allow Syria greater leeway under US sanctions.
### Growing Collaboration with the UAE
In a recent development, Syrian authorities inked an initial agreement worth $800 million with the UAE’s DP World to enhance Tartus port. This marks a significant step in Syria’s relations with the UAE, coinciding with the announcement of adjusted US sanctions concerning Syria.
### Shift Towards New Currency Production
Earlier this year, Syrian officials began considering the option of currency printing in Germany and the UAE. Their initiatives have gained momentum since the European Union eased some of its sanctions against Syria back in February.
The proposed redesign will exclude the image of former leader Bashar al-Assad from one of the existing denominations of the Syrian pound that is still in circulation.
Syria’s current leadership is aiming to swiftly revitalize an economy that has suffered devastation over the past 13 years of conflict. The situation has been exacerbated by a recent shortage of banknotes.
### Previous Currency Production by Russia
Russia, a major ally of Assad, was responsible for printing Syria’s currency throughout the prolonged civil war after EU sanctions halted a contract with a European firm. Despite Assad’s departure to Russia last December, Damascus has continued its association with Moscow, receiving cash shipments, fuel, and wheat as Russia seeks to maintain its military presence in Syria’s coastal areas.
This ongoing collaboration has raised concerns among European nations eager to diminish Russian influence amid the ongoing conflict in Ukraine. In response to the evolving financial landscape, the EU has lifted certain restrictions on Syria’s financial sector, specifically allowing for the production of currency.
### Ongoing Currency-Printing Negotiations
Syria is currently in advanced discussions regarding a currency-printing agreement with Oumolat, a company based in the UAE. This negotiation follows recent visits by Syria’s central bank governor and finance minister to the UAE.
While Oumolat has not commented on the issue, German companies, including state-supported Bundesdruckerei and private entity Giesecke+Devrient, have expressed interest in the currency production opportunity, although it remains unclear which company will secure the contract. Bundesdruckerei has stated it is not engaged in any negotiations with the Syrian government, while Giesecke+Devrient has chosen not to comment.
Requests for input from the UAE foreign ministry, the German government, and Syria’s central bank governor have gone unanswered.
### Current Economic Challenges
Today, there is a notable scarcity of Syrian pound notes, with official sources and bankers attributing differing reasons for this situation. Authorities believe that hoarding by citizens and less savory actors is to blame, while bankers assert it is the government’s strategy to limit the currency supply, partly to control the exchange rate.
Banking institutions frequently deny access to depositors and businesses attempting to access their funds, intensifying the pressure on an already strained economy that faces new competition from low-cost imports. As of Friday, the Syrian pound was trading at approximately 10,000 per US dollar in the black market, a notable decrease from around 15,000 prior to the fall of Assad. For context, just before the civil war, the value of one US dollar was 50 pounds.