Central Bank of Syria: Currency replacement and the removal of two zeros will not affect purchasing power

The Central Bank of Syria announced a significant monetary measure aimed at restructuring the country's cash circulation, emphasizing that the process of replacing the current currency with the "new Syrian pound" is a purely administrative procedure that does not involve any devaluation of the currency or affect citizens' purchasing power. This decision comes at a time when markets are anticipating any monetary changes, and the bank is clarifying the mechanism of the transition and the transition period.

National program to simplify cash transactions

The bank explained in its official statement that the replacement process is part of a comprehensive national program aimed at simplifying daily transactions. This step primarily aims to address the technical and accounting difficulties resulting from the inflation of currency figures, as two zeros will be removed from the old currency, making transactions and calculations easier and clearer for both individuals and institutions.

This measure comes in an economic context where the national currency has faced significant challenges in recent years, leading to the need to carry large quantities of banknotes for even simple transactions. Redenomination is a globally recognized monetary tool used by countries to reduce the administrative costs of managing currency and facilitate banking transactions, without, in itself, affecting the real value of wealth.

Exchange mechanism: 100 old lira equals 1 new lira

According to the standard announced by the Central Bank, the equation is simple and clear: every 100 Syrian pounds of the old issue is equivalent to one Syrian pound of the new issue. The bank emphasized that this change is merely a "re-expression" of monetary values. This means that salaries, bank deposits, debts, and contractual obligations will automatically and systematically convert to the new value without citizens losing any of their financial rights.

Transitional period and guarantee of rights

To ensure a smooth transition, the bank established a transition period during which both currencies (old and new) would circulate side-by-side as legal tender. During this period:

• It is not permissible to refuse to deal with either currency.
• Prices in the markets are displayed in both currencies together to ensure transparency and prevent manipulation.
• Purchasing power will remain stable, as the relevant authorities will impose strict controls on the markets.

After the end of the transitional period, the old currency will lose its status as a daily trading instrument, but it will not lose its financial value; its holders can exchange it exclusively through the branches of the Central Bank of Syria for a period of up to 5 years, giving citizens enough time to sort out their financial affairs.

Replacement outlets and geographic coverage

The bank confirmed that the exchange process will be available through thousands of authorized points of sale across the Syrian Arab Republic, including public and private banks, microfinance institutions, and exchange and domestic money transfer companies. The bank also emphasized that there are no exchange outlets outside of Syria, meaning that transactions must be conducted within the country exclusively.