In mid-May, following the U.S. administration’s policy shift during high-level meetings in the Gulf, the United States announced a partial lifting of sanctions on Syria. This decision was seen as a significant political turning point in the Middle East, one that many hoped would have a positive impact on Syria’s economy and on the exchange rate of the Syrian pound (SYP) against foreign currencies, especially the U.S. dollar.
The announcement sparked cautious optimism among some Syrians, while others remained focused on the Syrian pound’s volatility, still unsure whether this policy shift would bring tangible change to everyday life.
A Noticeable Improvement
According to Syrian economist Imad al-Din al-Musbeh, the Syrian pound has recently shown some signs of recovery, strengthening from around SYP 10,000 per dollar to approximately SYP 9,300. Al-Musbeh attributes this improvement primarily to the psychological boost the sanctions announcement provided, which temporarily slowed speculative trading, even though solid financial tools to support the currency remain absent.
Speaking to +963, al-Musbeh emphasized that beyond this short-term gain, what really matters is long-term exchange rate stability. Sustained stability would reflect healthier trade flows, more remittances from Syrians abroad, and potential growth in sectors like tourism. Such stability would also reduce uncertainty, encourage economic planning, and prevent damaging cycles of rapid devaluation and sharp rebounds.
He also stressed the need to distinguish between political decisions and practical implementation. Although the U.S. easing of sanctions on May 13, 2025, created a legal framework for economic engagement, the mechanisms to translate this into real financial transactions are still lacking.
International and regional financial institutions remain hesitant to resume direct dealings with Syrian banks, waiting for clearer guidance and stronger guarantees that they won’t face future penalties.
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The Bigger Problem: Banking Isolation and Structural Problems
Al-Musbeh points out that the core issue persists: the Syrian banking system remains largely cut off from the global financial network. Syria is still excluded from the SWIFT system, the backbone of international money transfers. This isolation continues to block foreign direct investment and complicates the inflow of much-needed foreign currency through remittances.
Without meaningful financial reintegration and a stable legal environment, al-Musbeh warns that the impact of easing sanctions will remain very limited. International companies are still cautious and largely staying away.
What’s needed, he says, are deep structural reforms; not just the removal of a few restrictions. Rebuilding the country’s economic foundations and regaining access to global markets will take more than a symbolic political gesture.
The Syrian pound’s struggles cannot be explained by sanctions alone. Years of conflict and mismanagement have left the Syrian economy structurally broken. Local production has collapsed, infrastructure is in ruins, trust in the banking sector has eroded, and the country is starved for hard currency.
The easing of sanctions so far has not been accompanied by meaningful steps to reopen trade channels, restore international investment, or rebuild productive industries; all of which are essential for any sustainable economic recovery.
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Production First
According to economist Samir Tawil, the recent improvement in the exchange rate is fragile and not solely tied to the sanctions issue. Speaking to +963, Tawil emphasized that any real strengthening of the Syrian pound must be driven by domestic production, specially manufacturing and exports.
He also noted the critical importance of having sufficient foreign currency reserves in the Central Bank, which currently remains limited. This lack of reserves keeps the dollar trading at approximately SYP 9,200 to 9,500.
Tawil stressed that raising wages and addressing the massive gap between salaries and prices is crucial to curbing inflation and improving purchasing power, both necessary steps for sustainable economic stability.
For now, Syria is stuck in a state of economic stagnation, with low consumer spending and no clear signs of recovery. This stagnation is likely to prevent the pound from making significant, lasting gains.
