Syria’s Gold Reserves Intact Amidst Depleted Foreign Currency Reserves
Damascus, Syria – Despite the tumultuous overthrow of Bashar al-Assad’s regime and the ensuing chaos, Syria’s central bank has managed to preserve its gold reserves, which remain at approximately 26 tons, the same level as at the outset of the civil war in 2011. This equates to a value of roughly $2.2 billion at current market prices. This information comes from four individuals familiar with the situation who spoke to Reuters. However, the nation’s foreign currency reserves have dwindled significantly, painting a stark contrast to the preserved gold holdings.
The stark reality of Syria’s financial situation is revealed in the dwindling foreign currency reserves. Sources indicate these reserves are now precariously low, estimated to be around $200 million in cash. This represents a dramatic decline from the $14 billion reported at the end of 2011 and the $18.5 billion estimated by the International Monetary Fund in 2010. This depletion is attributed to the Assad regime’s utilization of these funds to finance the war effort, secure essential supplies like food and fuel, and maintain its grip on power.
The Syrian central bank’s gold vault, a heavily fortified chamber requiring three separate keys, a combination code, and boasting bomb-proof construction, has successfully protected the nation’s gold reserves. After the fall of Damascus, members of the new administration inspected the vault, confirming the gold’s presence. While looters briefly gained access to parts of the central bank, making off with Syrian pounds, the main vault remained untouched, safeguarding the gold reserves from plunder. While some of the stolen Syrian currency was later recovered, the incident underscores the precarious security situation.
The central bank has resumed operations, its headquarters bustling with activity as employees return to work and citizens seek access to dwindling dollar reserves. In addition to the limited U.S. dollar reserves, the central bank holds several hundred million dollars’ worth of Syrian pounds. The Syrian currency has suffered a dramatic devaluation, plummeting from about 50 pounds per dollar pre-war to approximately 12,500 pounds per dollar currently.
The new administration, led by Hayat Tahrir al-Sham, a group with former ties to Al Qaeda which it has since renounced, faces significant economic challenges. The loss of oil fields, a primary source of foreign income, coupled with stringent Western sanctions, including those targeting the central bank and its governors, has severely hampered the nation’s economy. The decision to preserve the gold reserves, despite the financial pressures, was made to maintain sufficient collateral for the Syrian pound in circulation.
The new Syrian government is appealing for the lifting of international sanctions to aid in economic recovery, reconstruction efforts, and the repatriation of millions of refugees. However, Western powers, including the U.S. and Europe, remain cautious, adopting a wait-and-see approach to assess the nature of the new administration before considering any sanctions relief. The future of Syria’s economic recovery hinges on both internal policies and the international community’s response to the nation’s new leadership.
