Syria maintains a multiple fixed exchange rate system that pegs the value of currency to the U.S. dollar. All the official rates overvalue the Syrian pound to varying degrees. Two principal exchange rates are used: the Official Rate that devalued the national currency in 1988 from S£3.925 to S£11.225 per U.S. dollar, and the Neighboring Countries Rate (NCR) that was introduced in 1990 and is periodically adjusted. The NCR was S£46.50 per U.S. dollar, according to EIU estimates in 2000. Tourist hotels use the Official Rate. Most local transactions are carried out at the NCR rate. A blended rate applies provisionally to certain public sector transactions, including sales of oil and gas. The black market rate has hovered between S£46 and S£54 per U.S. dollar since the early 1990s.
Over the last decade, the Syrian government has contracted the inflation rate from 34 percent in 1988 to minus 0.5 in 1999. The EIU forecasts that weak Syrian growth and the current low level of economic productivity in the local economy will further help the government keep inflation in check. The potential increase in government spending due to public sector wages and a steady growth in global non-oil commodity and raw material
|Exchange rates: Syria|
|Syrian pounds per US$1|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
|GDP per Capita (US$)|
|SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.|
prices might threaten to reverse this trend over the forecast period.