Economists and business owners confirm that displaying prices in US dollars, particularly in Syria’s unstable markets, effectively increases demand for the dollar and pushes its value higher. This effect is both psychological and behavioural, and it represents a challenge to the stability of the national currency. Experts argue that decisive intervention by monetary and regulatory institutions is necessary to curb this phenomenon and to restore confidence in the Syrian pound.
Across the streets and markets of Syria, it has become increasingly common to see signs that read “price equivalent in US dollars,” even if payment is made in Syrian pounds. This practice has stirred debate over whether it fuels demand for the dollar and accelerates its rise, raising fears of an unofficial “dollarisation” of the economy.
Economists explain that pegging prices to the dollar creates what is known as the “dollarisation of the economy,” a stage at which the local currency loses its role as the standard unit of value. In such cases, demand for the dollar extends beyond trade and imports, to cover even daily retail transactions.
As demand increases — whether from consumers, traders, or speculators — the value of the dollar rises steadily against the local currency. In a country marked by constant exchange rate volatility, the US dollar has ceased to be merely a foreign currency; it has become the “market benchmark” against which all values are measured.
While the practice of announcing prices in dollars has become widespread, a central question remains: does this practice directly weaken the pound by raising demand for the dollar? Many experts believe it does, whereas others argue that dollar-based pricing does not necessarily remove dollars from circulation, but rather increases the volume of transactions denominated in them, which may sometimes stabilise prices.
From the Market to the Consumer: The Dollar as Price Compass
A survey of several shops and online platforms reveals that many announce their prices directly in US dollars or peg their products to the parallel-market exchange rate. This trend is visible across many sectors, from electronics and automobiles to real estate and consumer imports.
Dr. Ahmad Qaneer, Professor of Economics at Damascus University, told +963: “Listing prices in dollars, and using it as the primary reference in trade, is a major driver of dollar demand. Once goods are priced in dollars, both buyers and sellers are compelled to hold dollars to complete transactions. This increases demand in practice and in perception. The more people begin to price in dollars, the more the national currency becomes a mere intermediary. People rush to acquire dollars to secure future needs or investments.”
“When prices are set in dollars, individuals also hold onto the currency as a store of value, which fuels speculation and pressures the market. Demand rises, and with it the exchange rate,” he added.
Citizens Between Hammer and Anvil
In practice, many Syrian consumers now encounter shops that display prices as “equivalent in dollars,” even though payment is in pounds. This behaviour, consumers say, undermines confidence in the Syrian currency and drives many to seek refuge in the dollar.
Layla, a public employee, told +963: “It feels like everything is tied to the dollar. I even measure my salary against it daily to understand its real value.”
Khaled, electronics shop owner, explained: “Customers no longer trust a price unless it is pegged to the dollar. We also need this system to protect ourselves from volatility — otherwise, we lose capital in a matter of days.”
Ahmad, who runs an electronics store, noted that some suppliers require him to pay directly in dollars, or at least at the dollar’s parallel rate. This forces him to purchase dollars regularly: “It’s the only way to avoid sudden shocks in the rate that could wipe out my profits.”
Mona, hoping to buy a car, said: “I follow the dollar rate daily because I know the car price will rise with every increase in the dollar, even though I’m paying in pounds.”
For citizens, dollar-based pricing has become more than a technical accounting tool: it is a psychological and economic factor that fuels demand for the dollar and erodes confidence in the pound.
Expert Perspectives
Dr. Mahmoud Khamis, an economist, told +963: “The link between announcing prices in dollars and the rising demand for them is cyclical. It feeds on the lack of trust in the local currency. Solving this requires comprehensive economic policies that rebuild confidence in the pound.”
He listed several mechanisms, among them: pricing in dollars compels market actors to hold them for transactions, it creates the perception that the dollar will remain the most valuable currency, encouraging further demand, and it fosters “informal dollarisation,” whereby society begins to think in dollars rather than pounds.
“The danger,” he added, “lies not only in the exchange rate but in reinforcing the idea that the pound is unfit as a measure of value. Over time, this mindset pushes both traders and consumers to hoard dollars, reducing supply and driving the price higher.
Official Position
A source at the Syrian Ministry of Economy told +963: “Syrian law prohibits announcing prices in dollars, and such cases are legally treated as violations. However, the widespread use of the practice reflects weak enforcement and the absence of realistic alternatives.”
“Pricing in pounds strengthens its stability, while linking prices to the dollar amounts to an indirect admission that the local currency is not trusted,” the source added.
Possible Solutions
Dr. Youssef al-Mutlaq, a financial markets expert, explained to +963: “Countries such as Lebanon, Argentina and Turkey experienced similar phenomena, where dollar-based pricing worsened currency crises. Others, like Egypt, managed to reduce it through strict regulation, which helped stabilise the exchange rate.”
“The relationship is circular. A weak currency encourages dollarisation, and dollarisation further weakens the currency,” he added.
Al-Mutlaq concluded: “Breaking the cycle requires government action. This starts with laws mandating pound-based pricing, supported by strict regulation of the black market. Restoring confidence also demands balanced monetary policies, stimulating local production to cut imports, securing safe remittance channels for expatriates, and offering savings instruments in pounds that guarantee real value. Without such measures, citizens will remain trapped in the obsession with the dollar.”
