US Sanctions Hit Assad and His Wife as Syria Devalues Currency

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US Sanctions Hit Assad and His Wife as Syria Devalues Currency

The United States Wednesday imposed sanctions on 39 individuals and entities including Syrian President Bashar al-Assad and his wife Asma to choke off revenue for his government in a bid to push it back to United Nations-led negotiations.

In a statement announcing the designations imposed under the Caesar Syria Civilian Protection Act - signed by President Donald Trump in December - U.S. Secretary of State Mike Pompeo said "many more" sanctions against Assad government should be expected in the coming weeks and months.

"We anticipate many more sanctions and we will not stop until Assad and his regime stop their needless, brutal war against the Syrian people.''

Meanwhile, Syria's central bank devalued the Syrian pound Wednesday giving in to weeks of depreciation on the black market as new US sanctions took effect.

The central bank raised the official exchange rate from 704 to 1,256 Syrian pounds to the dollar, in a statement published on its social media pages.

The previous rate had been in force since March.

Earlier this month, the war-torn country's currency hit a record low on the black market of around 3,000 pounds to the dollar, sparking rare protests, before appreciating slightly after an apparent injection of dollars.

On Wednesday, the rate on the parallel market stood at around 2,600 to 2,800 pounds to the dollar, traders told AFP.

The devaluation comes as the United States prepares to implement new sanctions this week under the Caesar Act, targeting foreigners doing business with the Damascus government, as well as reconstruction of the country.

Zaki Mehchy, a senior consulting fellow at the London-based Chatham House think tank, said the central bank was trying to minimize the gap between the official and black market rates.

"It is trying to encourage people to use the official channel instead of the black market," he said.

But the pound would probably continue its slide, punctuated by short periods of appreciation, he said.

Syria's economy has been battered by nine years of war, and is now reeling from the knock-on effects of a financial crisis in neighboring Lebanon that has stemmed the flow of dollars into government-held areas.

Analysts have said the recent lows on the black market are likely due to worries ahead of the introduction of new US sanctions, and the sudden fall from grace of tycoon and cousin of the president, Rami Makhlouf, which has set other top businessmen on edge.

The Damascus government has long blamed the country's economic crisis on international sanctions.

Last week, President Bashar al-Assad sacked his prime minister of four years after criticism of the government's handling of the crisis.

Before the conflict, the exchange rate stood at 47 Syrian pounds to the dollar.

 

Source: Agencies