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Central Bank of Syria

Coordinates:33°31′16″N36°17′46″E/ 33.52111°N 36.29611°E/33.52111; 36.29611
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Central Bank of Syria
مصرف سورية المركزي



Central Bank of Syria on theSabaa Bahrat SquareinDamascus
HeadquartersDamascus,Syria
Established28 March 1953(legal)
1 August 1956(began operations)
Ownership100%state ownership[1]
GovernorMohammed Issam Hazima
Central bank ofSyria
CurrencySyrian pound
SYP (ISO 4217)
Bank rate0%
Interest on reserves6.00%
Preceded byBanque de Syrie et du Liban(until 1953)
Websitehttps:// cb.gov.sy/

TheCentral Bank of Syria(CBS;Arabic:مصرف سورية المركزي,romanized:Masrif Suriat Almarkazi) is thecentral bankofSyria.The bank was established in 1953 and started operations in 1956. Its headquarters are inDamascus,with 11 branches in the provincial capitals.[2]The objective of the bank is "to foster the stability, integrity and efficiency of the nation’s financial and payment systems so as to promote optimal macro economic performance".[3]

The CBS issues Syria's currency, theSyrian pound(LS), and sets the intervention price in the foreign currency market for the Syrian pound on a daily basis. The CBS exercises control over all banks operating in Syria.

History

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At independence, French- and British-owned banks dominated banking activity in Syria. The largest bank, the French-ownedBanque de Syrie et du Liban(Bank of Syria and Lebanon), assumed central bank functions and became the bank of currency issue, in addition to its commercial operations. Syria joined theInternational Monetary Fund(IMF) on April 10, 1947[4]and fixed the exchange rate at £S 2.19 to US$1.[5]

The law to establish the Central Bank of Syria was passed in 1953, but the bank did not operate until 1956. Its functions included issuing notes, controlling the money supply, acting as fiscal agent for the government, and controlling credit and commercial banks.[6]It was also to act as the country's development bank until specialized banks were established for various sectors. The Central Bank had considerable discretionary powers over the banking system but was itself responsible to and under the control of the Council on Money and Credit, a policy group of high-ranking officials.

After the 1956Suez War,French and British banking interests wereseizedas enemy assets. In 1958, and after the union with Egypt, the state began to Arabize the commercial banking system and in 1961 implemented a policy of limited nationalization.[6]

In 1966, the state nationalised all commercial banking, merging all existing commercial banks into a single consolidatedCommercial Bank of Syria.The government also created specialized banks to promote economic development.[6]

International sanctions

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TheUnited Stateshas imposed sanctions against the Central Bank of Syria since May 2004,[7]under Section 311 of theUSA PATRIOT Act,with the Bank being accused ofmoney laundering.The sanctions shut Syria out of the global financial system. To circumvent the sanctions, Syrians effect foreign transactions through banks in neighbouring countries, especially Lebanon,[8]but making them vulnerable to economic disruptions in those countries.

Because of the government's actions in theSyrian Civil War,the U.S.,[9]Canada,EU,Arab LeagueandTurkeyhave all imposed sanctions on Syria, including the Syrian Central Bank.[7][10][11]The Syrian Central Bank has been actively trying to undermine these various sanctions, with bank officials meeting friendly institutions such asGazprombankexecutives inMoscowin March 2012.[12]The Bank has taken an increasingly clandestine role in the domesticprivate sectoras the country's failing economy has deterred foreign investment.[13]

On 23 December 2020, theUS Department of the Treasury'sOffice of Foreign Assets Control(OFAC) sanctioned the Central Bank of Syria along with nine other entities and seven individuals, due to their role during the Syrian Civil War.[14]

Gold reserves

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In April 2012,Reutersreported that since the outbreak of the Syrian Civil War in 2011, Syria's gold reserves have been cut in half from the pre-civil war level of about $17 billion, with the Syrian government using the reserves to cope with international sanctions.[15]The Governor of the Central Bank Adib Mayalah has sought to deny these reports.[16]This is similar to how the Syrian government is using itsforeign reservesto meet the demands of abudget deficitwhich has greatly increased to aboutUS$6.7 billion.[17]

Attacks on bank

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Since the start of the Syrian Civil War, the Central Bank building was attacked three times: in April 2012 arocket-propelled grenadewas fired at the building; in April 2013 it was affected by a car bombing nearby; and in October 2013 it was hit by mortar shells.[18]

Governors

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  1. Izzat Traboulsi(1956–1961)
  2. Hosni Al Sawaf (1961–1963)
  3. Nourallah Nourallah (1963–1963)
  4. Adnan Al Farra (1963–1970)
  5. Nasouh Al Dakkak (1971–1978)
  6. Rifaat Al Akkad (1978–1984)
  7. Hisham Mutawalli (1984–1987)
  8. Mohammad Al Sharif (1987–1995)
  9. Mohammad Bashar Kabbarah (1995–2004)
  10. Adib Mayaleh (2005–2016)
  11. Duraid Durgam (2016–2018)
  12. Hazem Karfoul (2018–2021)
  13. Mohammed Issam Hazima (2021–present)

See also

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References

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  1. ^Jan Weidner (2017)."The Organisation and Structure of central Banks".Technische Universität Darmstadt. p. 265.
  2. ^"CBS's Branches in Syria".Archived fromthe originalon 4 October 2006.Retrieved11 October2013.
  3. ^"Central Bank of Syria official website".Archived fromthe originalon 25 September 2013.Retrieved11 October2013.
  4. ^"List of Members' Date of Entry".imf.org.Retrieved2021-07-26.
  5. ^"Third International Report - Exchange Restrictions".IMF.org.1952.
  6. ^abcBanking and Monetary Policy
  7. ^abCutler, David (2011-11-28)."Factbox: Sanctions imposed on Syria".Reuters.Archivedfrom the original on 2015-09-24.Retrieved2017-06-30.
  8. ^"Lebanon crisis wreaks havoc on Syria's war-torn economy".Reuters.29 November 2019.
  9. ^"US trade and financial sanctions against Syria".whitehouse.gov.29 April 2011.Retrieved2012-08-24– viaNational Archives.
  10. ^"Turkey Slaps Economic Sanctions on Syria".Fox News.2011-11-30.
  11. ^"Canadian Sanctions | Foundation for Defense of Democracies".Defenddemocracy.org. Archived fromthe originalon 2018-08-06.Retrieved2013-02-04.
  12. ^"Syria's Russian Connection".Wall Street Journal. 2012-08-14.Retrieved2012-08-25.
  13. ^"Syria backs down over import ban".Financial Times. 2011-11-04.Retrieved2012-08-25.
  14. ^"US sanctions Syria's Central Bank, 9 other entities, 7 individuals".Business Standard India.23 December 2020.
  15. ^"Syria selling gold reserves as sanctions bite: sources".Reuters. 2012-04-18.Archivedfrom the original on 2012-07-27.Retrieved2012-08-25.
  16. ^"Skepticism overshadows Syria's gold reserves".Xinhua. 2012-04-20. Archived fromthe originalon April 29, 2012.Retrieved2012-08-25.
  17. ^"Syria reverts to socialist economic policies to ease tension".Reuters. 2012-07-04.Archivedfrom the original on 2012-10-20.Retrieved2012-10-27.
  18. ^"Mortars hit Syria central bank in Damascus".NOW.AFP. 9 October 2013. Archived fromthe originalon 12 October 2013.Retrieved11 October2013.
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