Syria’s central bank governor pledges to enhance bank independence

Syria’s central bank governor, Maysaa Sabreen, has said she wants to boost the institution’s independence for monetary policy decisions since the fall of the Assad-led regime, The Arab Weekly via Reuters reported on January 14th.
In her first interview since taking office, Sabreen told Reuters: “The bank is working on preparing draft amendments to the bank’s law to enhance its independence, including allowing it more freedom to make decisions regarding monetary policy.”
In order for the amendments to go ahead, approval would need to be given from Syria’s new governing authority, although the process at this point in time is reportedly unclear. Sabreen has given no information about the timing.
On paper, the Central Bank of Syria has always been an independent institution. But during the previous regime, the bank’s policy decisions were in fact, determined by the government.
Sabreen also said that Syria’s central bank was considering methods to widen Islamic banking to bring in Syrians who steer clear from using traditional banking services.
Sabreen told Reuters: “This may include giving banks that provide traditional services the option to open Islamic banking branches.”
Islamic banking adheres to sharia or Islamic law and prohibits charging interest as well as investing in banned businesses which trade in alcohol, pork, arms, pornography or gambling. Islamic banking is established in Syria.
Sabreen also said: “The bank wants to avoid having to print Syrian pounds because this would have an impact on inflation rates.”
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When asked about the level of the country’s present foreign exchange and gold reserves, Sabreen would not give details, explaining that a balance sheet review is still in progress.
Several former governors and the Central Bank of Syria are affected by US sanctions enforced after Assad’s violent repression of protests in 2011, which developed into a 13-year civil war.
According to analysts, dealing with inflation and stabilising the currency will be Sabreen’s main duties as well as strengthening the conditions and operational nature of the financial sector.
According to the London Stock Exchange Group (LSEG) and central bank data, the Syrian currency’s value has decreased from 50 pounds per US dollar in late 2011 to just above 13,000 pounds per dollar on January 13th.
Sabreen said the central bank is also planning on restructuring banks owned by the state and is looking into bringing in regulations for money exchange.
Under Assad’s regime, the use of foreign currency was strongly constricted and many Syrians were reportedly fearful of saying the word “dollar.”
In order to enhance basic services, last week the US permitted a sanctions exemption for humanitarian aid, the energy sector and for sending remittances to Syria. But the central bank alone still faces sanctions.
A confidential document acquired by the Syrian Observatory for Human Rights (SOHR) revealed an extensive money-smuggling operation coordinated by the the Assad-led regime, Asharq Al-Awsat reported on January 8th. The operations were conducted by Syrian airlines to Moscow.
Sabreen said that enabling personal transfers from Syrians in foreign countries was a step in the right direction.
The Arab Weekly, Reuters, Asharq Al-Awsat