Why isn't the value of the Syrian lira rising despite available gold reserves?
The Syrian lira's value remains stagnant despite significant gold reserves, as economic experts highlight that other factors play crucial roles in currency valuation.
The governor of the Central Bank of Syria, Abd al-Qadir al-Husriah, announced that the bank's gold reserves have exceeded 42 trillion lira (approximately 380 billion USD), which theoretically covers more than 100% of the circulating cash volume, taking advantage of the rising gold prices. Despite the reserve being estimated at around 26 tons, this wealth has not led to a noticeable improvement in the value of the Syrian lira. In a televised interview, the central bank governor termed this development as a positive indicator of the bank's reserve composition.
Economic expert Firas Shaabo, speaking to the platform 'Syria Now,' elaborated on the complexity of currency valuation, noting that gold reserves alone do not support the rise of the new lira's value. He emphasized that while the increase in gold reserves has been beneficial due to global price surges, it does not necessarily correlate to improved exchange rates. Other indicators, such as foreign currency reserves, GDP, and the trust in government financial and banking policies, are critical for determining currency stability.
Shaabo remarked that the overall monetary mass of the lira remains affected by these wider economic factors and the presence of gold reserves does not compensate for deficiencies in other areas like foreign reserves and national economic performance. The implications of this situation reflect deeper economic challenges faced by Syria, as international financial dynamics and domestic economic policies will play pivotal roles in shaping the future of the national currency.