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Falling lira hits Syrian enclave backed by Turkey

AZAZ, Syria (Reuters) - In a part of northern Syria that Turkey’s army helped rebels capture in 2016, the plunge in value of the Turkish lira has hit shopkeepers, medical charities and fighters paid in the currency hard.

Turkey has turned from its military role in the rebel-held strip in Syria, that runs along its border between the towns of Afrin and Jarablus, to a longer-term one of stabilization, entwining the area’s economy with its own.

It has funded health and education services, trained local police and more recently joined insurgent factions together into a new armed force.

For those employed by Turkish-backed authorities and paid in lira, including security forces, an international sell-off of the currency, resulting in it losing around 40 percent of its value to the dollar so far this year, has brought new hardship.

The lira has also plunged in value against Syria’s official currency, the Damascus-minted Syrian pound.

“The lira was strong in the Syrian territories until two months ago, when it started to lose its strength gradually,” said Mohammed Hadi Hassano, 25, speaking in his exchange office in the city Azaz, just a few kilometers from the Turkish border.

“800 lira was equal to 100,000 Syrian pounds back then. Today the same amount is equal to only 40,000 pounds.”

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The lira began to weaken rapidly amid concerns over Turkish President Tayyip Erdogan’s influence on monetary policy, but was driven to record lows over a dispute between the United States and Ankara.

The dispute centers on the fate of a U.S. Christian pastor detained in Turkey on terrorism charges, and which saw Washington slap tariffs on some Turkish imports.

The Turkish lira’s volatility is a new illustration of how the involvement of regional or global powers in Syria’s fractured warscape can change things for people on the ground.

Besides Turkey, Iran, Russia and the United States each have forces deployed in Syria as well as providing other forms of support in territory held by their allies.

“When the Turkish lira began to lose value against the Syrian pound our salaries became worthless,” said Ghassan Kinno, 23, a fighter with a Free Syrian Army rebel faction in Azaz.

“The fighter receives his salary and goes to the market... and it’s barely enough for one week. This is the reality we are witnessing now. The situation is very difficult and there is no solution,” he said.

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Another man paid in Turkish lira in Azaz is Mohammed Sheikho, 53, who works for a medical relief organization.

“I lost an amount of nearly $100 dollars from my (monthly) salary. Who will compensate me for this loss? The merchants who are now raising prices? Or the organization paying my wages?” He said. His salary was previously worth about $525 a month.

Local political and military realities mean the lira and its fluctuations may continue to play an important role in Azaz.

“What is better for us is to be paid in Syrian pounds since we are spending our money in the Syrian territories. But in the end we have to abide by the rules of the side that supports us,” said Kinno.

Reporting by Khalil Ashawi in Syria; Writing by Angus McDowall in Beirut; Editing by Alexandra Hudson