Syria's currency strengthened by 2.5 per cent on Thursday after members of the US Congress backed a permanent repeal of sanctions, in a move welcomed by business chiefs and officials in Damascus.
The Syrian pound was trading at 11,700 to the dollar, compared with 12,000 on Wednesday before the House of Representatives approved the repeal of the Caesar Act. The 2019 law sharply toughened sanctions on the regime of former president Bashar Al Assad by blacklisting anyone dealing with it, and imposed sanctions on whole economic sectors.
“It is positive news, for our work and for the rest of the economy,” Ayman Al Amer, co-owner of Osoul Exhange in central Damascus, told The National. The pound was trading at 50 pounds to the dollar on the eve of the Syrian uprising in March 2011. By the end of the year, Syria was in civil war.
Syria’s Foreign Ministry on Thursday hailed the vote as a “pivotal moment” in relations with the US, calling it “a direct result of constructive diplomatic efforts” between the two countries. It said the step would help rebuild trust and pave the way for broader economic recovery from civil war.
“The vote represents a first step towards tangible improvements in trade flows, the availability of essential goods, medical supplies, and conditions that will support Syria’s reconstruction efforts,” it added.
The US administration has been urging Congress to scrap the legislation. President Donald Trump waived sanctions in May, saying that Syrian President Ahmad Al Shara should be “given a chance”, despite his “strong history”. But full repeal requires an act of Congress.
Mr Al Shara, who was a prisoner in Iraq during the American occupation, founded Hayat Tahrir Al Sham (HTS), the former Al Qaeda affiliate that led the offensive that toppled the Assad regime last December.
The proposal to repeal the Caesar Act sanctions was part of the National Defence Authorisation Act for Fiscal Year 2026. The bill will now go to the Senate, and if passed, will then head to Mr Trump's desk to be signed into law. No obstacles are expected regarding the sanctions, unless the wider bill encounters problems.
The Syrian businessman Abdulqader Al Deiri, who fled to southern Turkey during the war, said the expected repeal would help bring foreign banks into Syria and enhance post-Assad policies that no longer made it a crime to deal with the US dollar.
“It will make a difference as far as business and remittances when Syria enters the international finance system,” Mr Al Deiri said. He said banks from Jordan and Turkey are “ready to jump in”, but expects economic recovery to take years, given the destruction of the infrastructure, and Syria's fragmentation during the war.
Damascus merchant Samir Ibrahim said that although more foreign exchange will start flowing, disposable incomes need to improve. “Cashflow is meagre because so many people ran out of savings and stopped spending.”
The US bill would still require a review of the situation in Syria every 180 days, over the course of four years, to ensure that Damascus is taking counter-terrorism action, removing foreign fighters from government roles, and upholding minority rights. If the US government finds that the Syrian government is not fulfilling these goals, the bill stipulates that sanctions can be imposed on Syrian individuals.
Since the former regime was ousted, hundreds of Alawite and Druze civilians have been killed in government campaigns on the sects' heartlands on the coast and in the governorate of Sweida in the south of the country.
Syria became an economic backwater after a union with Egypt in the 1950s, during which socialist economic politics were implemented, followed by junta rule in the early 1960s. In the 1970s the Assad family regime's involvement in the Lebanese civil war and later occupation of the country helped bring foreign currency into Syria, either from illicit deals or through workers who smuggled themselves into Lebanon.
However, many members of the middle classes, including merchants and bankers, left Syria as the new rulers imposed a command economy and banned most private enterprises. Shortages became rife.
Bashar Al Assad ushered in economic liberalisation soon after he inherited power in 2000 from his father, Hafez Al Assad, but the benefits mostly went to what became oligarchs. The imbalances this created contributed to the start of the 2011 anti-regime protest movement.
Mohammad Hamza, who heads the state-owned company that runs Syria's yearly Expo, said that lifting sanctions would usher “a new era of economic openness and the restoration of trust”. Mr Hamza said the country would be able to import the material and the technology for reconstruction, as well as bring in foreign investment.
Lifting the sanctions, he said, would be a “tacit international admission that Syria is headed towards stability”.
