Syria Ends Dependence on Russia, Turns to UAE and Germany to Print New Money
Syria is preparing to turn a new page in its monetary policy by shifting its money printing operations from Russia to the United Arab Emirates (UAE) and Germany. The move not only reflects a shift in Damascus’ geopolitical balance but is also a strategic step to rebuild its economy after more than a decade of war.
A series of negotiations with currency printing companies in the UAE and Germany have been underway since the beginning of the year, after the EU eased some financial sanctions on Syria in February, according to three sources close to the Syrian government. This paves the way for Syria to access modern printing technology while reducing the influence of Russia – a traditional ally of the old regime.
In particular, Syria is in the process of signing a contract with the UAE-based Oumolat company – one of the leading currency printing companies in the region. Meetings between representatives of the Syrian central bank and the company's leadership took place during a visit to the UAE in early May. Meanwhile, in Germany, two major money printing companies, Bundesdruckerei and Giesecke+Devrient, are also said to be considering joining the process, although there has been no official confirmation.
In an important symbolic change, Syria will remove the image of former President Bashar al-Assad from one of its purple notes in circulation – a clear signal of a break with the past.
In parallel with the new banknote plan, Syria has just reached an $800 million deal with the UAE-based DP World to develop the port of Tartus – a strategic seaport on the Mediterranean. This is the first agreement signed after the US unexpectedly announced the lifting of sanctions on Syria, opening up opportunities for economic recovery and attracting foreign investment.
However, despite continuing to receive support from Russia – including shipments of cash, fuel and wheat in recent months – the new Syrian government is showing a desire to balance international influence and reduce dependence on Moscow, in the context of the complicated developments in Ukraine and the EU's efforts to isolate Russia economically.
Currently, Syria is facing a serious shortage of banknotes. Many banks in Damascus are refusing to let customers withdraw cash, causing a wave of hoarding among people and putting great pressure on the financial system. Some opinions say that the government deliberately controls the flow of money to regulate the exchange rate – which is fluctuating strongly.
On the black market, the Syrian pound is now trading at around 10,000 pounds to the dollar – a significant improvement from the 15,000 it traded at before Mr Assad was overthrown. But it is still a steep decline from 2011, when $1 bought just 50 Syrian pounds.
The new twist in Syria’s monetary policy is not only economic, but also has clear political implications – reflecting a country trying to reinvent itself and regain its place in the international community after more than a decade of conflict and isolation.