Syria's central bank has replaced more than a third of cash in circulation with newly printed banknotes, governor Abdulkader Husrieh told The National in an exclusive interview.
The progress marks a significant step towards restoring monetary control after years of war and steep currency collapse.
In early January, the central bank introduced the new banknotes, removing two zeroes and the images of dictator Bashar Al Assad and his family, in an effort to stabilise the economy and restore confidence in the battered currency, which lost more than 99 per cent of its value after the civil war began in 2011.
Mr Husrieh said the central bank had replaced about 35 per cent of circulating cash with new banknotes.
He welcomed “measurable progress” in restoring control over the money supply. “The objectives go beyond stabilisation; we expect reduced dollarisation, improved confidence in the Syrian pound and greater monetary sovereignty,” he added.
The simplification of currency by removing zeroes is known as redenomination.
The process is typically used by central banks to restore confidence in a currency and simplify transactions after periods of high inflation and devaluation. It does not actually change the value of the currency.
The Syrian pound’s exchange rate plunged to around 10,000 to the US dollar before the redenomination, compared with about 50 before the war.
The steep devaluation has significantly complicated daily transactions, with Syrians often carrying large wads of banknotes in plastic bags to pay for basic goods.
Mr Husrieh declined to comment on where the currency was printed, amid reports that the Russian state-owned company Goznak, which is under US and EU sanctions, is among the suppliers.
“I can clarify that printing has been allocated to three suppliers. All of these printing institutions are internationally certified facilities that meet global security and quality standards,” he said.
Gap assessment
To accelerate the resumption of ties with foreign lenders and boost the credibility of Syria’s financial sector, the central bank has begun the first phase of a review known as a gap assessment, entrusted to US consulting firm Oliver Wyman.
A gap assessment is a review comparing a financial institution’s practices with international standards to identify reforms needed to restore credibility.
“The fieldwork will start shortly,” Mr Husrieh told The National.
After years of isolation from most dollar transactions, Syrian banks have been steadily reconnecting with the global financial system.
But despite the lifting of western sanctions since the collapse of former president Bashar Al Assad's regime, lingering compliance concerns among foreign banks have continued to hinder Syria’s reintegration into international banking channels.
“We will be working on addressing any compliance, governance and transparency benchmarks to be identified in their report,” Mr Husrieh said.
Reviving Syria’s dilapidated banking sector is viewed as a top priority to manage the billions of dollars expected to flow into the country and fund its reconstruction.
The central bank is also seeking to reactivate its account with the Federal Reserve Bank of New York, a key step towards restoring access to dollar transactions after years of financial isolation.
Mr Husrieh said this “remains a strategic objective”. “We are still in the process and we have progressed very well.”
Integration deal
Mr Husrieh welcomed the Damascus government's integration deal with the rival Syrian Democratic Forces, a Kurdish-led force that once controlled a quarter of Syria’s territory. Under pressure from advancing Syrian troops, the SDF agreed to join the central government in January.
During last month's blitz offensive, Damascus retook control of major oil and gasfields previously held by the SDF. Revenue from the fields had financed the semi-autonomous administration in the north-east.
Mr Husrieh said oil and gas revenue, which will now benefit the whole of Syria, could drive double-digit GDP growth within a year, far exceeding international forecasts. In July, the World Bank estimated the Syrian economy would grow by a modest 1 per cent in 2025.
The proceeds will be “handled through structured sovereign accounts under state oversight", with the central bank playing a “custodial and regulatory role", the governor said.
While final allocations are still under discussion, he said the revenue is expected to fund the needs of the energy and power sectors, reconstruction, public services and economic recovery programmes.
The deal has also allowed the central bank to extend its financial authority across the country. In January, the bank announced plans to open a branch in the northern city of Raqqa, previously under SDF control. Mr Husrieh said a branch manager had been appointed and the office was expected to open shortly.
He added that another branch was planned for the north-eastern city of Hasakah, also formerly under SDF control.
“This move is symbolically and institutionally important because it represents the restoration of monetary authority and financial sovereignty in a strategically important region,” Mr Husrieh said.
Lebanese losses
Another major challenge facing the revival of Syria’s financial sector is absorbing losses linked to Lebanon’s collapsed banking sector, where Syrian lenders have more than $1.6 billion in exposure.
In September 2025, the central bank urged financial institutions to recognise and provision for losses tied to Lebanon’s 2019 financial collapse by March.
“All banks have complied, though they remain at varying stages of implementing their restructuring plans,” Mr Husrieh told The National.
Some banks are more exposed than others and will need to find sustainable ways to absorb these losses and clean up their finances if they are to remain solvent.
“This year is very crucial for the whole banking sector as we would like to complete rehabilitation of the financial sector while we license new banks,” he added.
He warned that banks failing to comply will face enforcement action including penalties, capital restrictions, management accountability measures and supervisory intervention.
“We are closely working with banks to avoid non-compliance and have all banks to be solvent and liquid,” he said.
“Financial transparency and systemic stability remain core priorities for us to regain trust in the financial system,” he added.
