Syria central bank report gives rare glimpse into wartime finances

October 1, 2013

* Former minister says numbers are "dramatic"

* Conflict devastated much of Syria's economy

* Government stopped publishing figures after crisis

By Alexander Dziadosz

BEIRUT, Oct 1 (Reuters) - Syria's foreign reserves crashed by more than a third in the year to the end of 2011, figures published by the central bank showed, giving a rare glimpse into the war-stricken country's finances.

An undated report on Syria's central bank website showed foreign reserves fell to about 158 billion Syrian pounds at the end of 2011 from around 242 billion a year earlier - the most up-to-date figures published since the crisis started.

The figures were converted to pounds at an old official rate the report listed as 11.2 pounds to the dollar, vastly different from the current unofficial rate of around 167 to the dollar.

While the numbers are too old to indicate Syria's current reserve levels, they suggest reserves were dropping at a rapid pace even during the conflict's early days when fighting was relatively limited.

Economists estimated foreign reserves at about $16-18 billion before the crisis, when Syria was earning some $2.5 billion a year from oil exports. Most of the oil revenues dried up in late 2011 when the European Union imposed sanctions on Syrian crude purchases.

Damascus stopped giving monthly figures shortly after the uprising started in March 2011 and it was not immediately clear exactly when or why the new report had been published.

Abdallah al-Dardari, a U.N. economist and former Syrian minister, said the published figures showed the strain the crisis had put on government finances, although it was impossible to draw conclusions about current reserves.

"If by the end of 2011, the country had lost 35 percent of foreign reserves, one can then only imagine and try to speculate what would be the impact by the end of 2013," he said at a conference in Beirut.

"By any standard it would be a very dramatic impact," added Dardari, who was President Bashar al-Assad's deputy prime minister for economic affairs for six years until shortly after the uprising started in March 2011.

The figure for the central bank's reserves included assets such as cash and deposits, which it put at about 130 billion pounds, special drawing rights of about 4.8 billion pounds and gold worth about 1.4 billion pounds.

The report also put the foreign assets of public banks at around 217 billion pounds at the end of 2011, down from about 261 billion at the end of 2010.

The central bank couldn't be reached for comment.

Syria's conflict has devastated major sectors of the economy, including industry in the cities of Aleppo and Homs, and foreign currency earners such as oil exports and tourism.

U.S. and European financial sanctions imposed after the crackdown have since made it harder to import fuel and wheat.

But Syria has received extensive support from its ally Iran, including billions of dollars in credit facilities to buy oil products, to help shore up its finances.


The government has also taken measures to stop dollarisation of the economy, including threatening traders who price goods in foreign currency with up to 10 years in jail.