Syria clamps down on "manipulating" money exchange companies

Syria clamps down on "manipulating" money exchange companies
# 20 August 2013 01:08 (UTC +04:00)

Baku-APA. The Syrian government has launched a wide-scale crackdown on "manipulating" money exchange companies to curb further depreciation of the Syrian pound, a move that may relieve itself from blames of incompetence in holding up the currency's value, APA rpoerts quoting Xinhua.

Recently, Syrian authorities closed Around the Gulf and al- Shaar money exchange companies, which reportedly took part in manipulating the exchange rate of the Syrian pound by trading the national currency on the black market. Some employees of the companies were arrested.

In a first ever measure since the start of the Syrian crisis nearly 29 months ago, the state-run TV aired live confessions of the employees.

Ammar Masbaha, one of them, said that the company used to buy U. S. dollars from the central bank and sold them on the black market rather than the citizens.

The Central Bank of Syria (CBS) used to intervene every now and then by pumping U.S. dollars into the market to meet its demand for hard currency and to sustain a stable price of the pound, which has sharply declined against the dollar.

The Syrian pound plunged last month from 230 to 310 against one dollar within 10 days in the black market. The government was quick to react. The CBS sold to exchange companies millions of dollars at prices lower than in the black market by at least 25 pounds. It succeeded in bringing down the price of the dollar from 315 to 200 pounds.

While expectations were high that the pound will improve further, it stayed stable for nearly a month, fueling concerns over the failure of the government and the CBS to control the situation.

Syria blames the steep depreciation of the pound on manipulators in the black market, and the Syrian government has vowed that it will not be lenient with those manipulators.

A number of decisions have been recently issued to ban dealings in hard currency and introduce jail terms for up to 10 years and fines for offenders.

In a televised confession, Masbaha said the authorities seized various hard currencies, which the company bought from the CBS and sold in the black market, indicating that the price on the market was determined by a group of companies and individuals in coordination with each other, which was "the cause of disorder in the exchange rate."

On the other hand, authorities seized a network of people who distributed counterfeit dollars in the market.

Local media and websites have called on the government to make an overall review of the operations of exchange companies and scrutinize their "suspicious" role in the decline of the pound against the dollar.

The Syria Steps website charged that those companies are likely linked to foreign parties whose main goal is to hit the Syrian economy through the pound's depreciation.

"Bold steps are needed to be taken toward freezing the work of 'manipulating' exchange companies until the end of the crisis," it said.

It also called for the formation of an independent committee to investigate the issue of the pound's exchange rate and make sure that the hard currencies pumped by the CBS into the market play their intended role.

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