BEIRUT Aug 4 Syrian traders who price goods in
foreign currency will face up to 10 years in jail, the
government announced on Sunday in a move aimed at stemming the
increasing dollarisation of an economy crippled by two years of
A decree issued by President Bashar al-Assad "forbids the
use of anything other than the Syrian pound as payment for any
type of commercial transaction or cash settlement".
Traders who violate the law face up to three years in jail
and a fine equivalent to double the value of the payment. If the
sum involved is over $5,000, punishment could rise to 10 years
with hard labour, according to the decree published by state
Bankers said Sunday's move reinforced existing prohibitions
on pricing goods in dollars - a law which has been increasingly
flouted after sharp falls and wild fluctuation in the Syrian
pound - and said the penalties had been stiffened.
"It's to prevent people from fleeing to the dollar," said
one Damascus banker, adding the decree would not have an impact
on banking operations.
"It does not in any way affect the banking sector - the
country needs foreign currency transfers," he said. "The idea is
that people don't all think in dollar terms as if there is no
local currency. It's more a psychological move with the currency
Sharp falls and fluctuations in the Syrian pound have led to
increasing use of the U.S. dollar in all walks of life, by food
sellers and manufacturers, taxi drivers and importers.
Before protests against Assad's rule erupted in March 2011
the pound stood at 47 to the dollar. After two years of war and
economic collapse, it now changes hands for around 200, and
briefly fell as low as 300 last month, exchange dealers say.
Devastation to the commercial and industrial cities of
Aleppo and Homs, together with the loss of foreign currency
earnings as oil exports and tourism dried up, have hit the
economy hard. Damage is estimated in the tens of billions of
dollars and this year's wheat crop is expected to fall by half.
The weakness and volatility of the local currency has pushed
up inflation and left many shopkeepers struggling to price their
goods in local currency.
"Having dollars, depositing them and using them as a
currency of savings has never been outlawed but even before the
crisis, dealing with dollars in domestic commercial transactions
was banned," said a chief currency dealer in a Damascus bank.
"This is a law that imposes more penalties," he said.
"Syrians can get transfers in dollars and importers can still
price their goods in dollar but they cannot put dollar price
tags on goods sold," he said.