The priorities for Syria’s central bank after sanctions liftedhttps://en.majalla.com/node/325705/business-economy/priorities-syria%E2%80%99s-central-bank-after-sanctions-lifted
The priorities for Syria’s central bank after sanctions lifted
After 14 years of conflict, building transparent institutions and systems that meet international standards is a prerequisite for reigniting the economy, says the Governor of the Central Bank of Syria
Al Majalla
The priorities for Syria’s central bank after sanctions lifted
After more than a decade of war, Syria faces enormous economic and social challenges. Since the outbreak of conflict in 2011, more than half of the country’s infrastructure has been destroyed, its GDP (gross domestic product) has shrunk by more than 60%, and four in every five Syrians now live below the poverty line.
Attention has largely focused on the humanitarian and political side. Despite its importance, the economy has played second fiddle. Yet a rare window of opportunity opened recently, when US President Donald Trump said sanctions on Syria would be lifted, with the European Union declaring a similar move.
This is among the biggest recent developments since the fall of the former regime last December, and offers a moment for reassessment. It is a chance to rebuild the economy from the rubble, an economy that can be more resilient, open, and independent than ever before. Yet to do so requires radical reform. That begins at the heart of the financial system: the Central Bank of Syria.
Politics vs monetary policy
The Central Bank of Syria is experienced in conducting monetary policy under international political pressure. Western sanctions, initially imposed to pressure the Assad regime, severely hindered the bank’s ability to perform its most basic functions: managing the currency, maintaining monetary stability, financing essential imports, and supervising the financial system.
A rare window of opportunity opened when US President Donald Trump said sanctions on Syria would be lifted
Worse still, these restrictions did not end with the fall of the regime. They remain in place and continue to obstruct any serious effort to build effective economic institutions. This is what makes the lifting of US and European sanctions so important. It offers the chance to engage internationally once again, reconnecting the Syrian economy with the global financial system and restoring confidence.
For Syria to recover, the central bank must transform from a defensive tool into a strategic driver of growth and stability. This means modernising monetary policy, rebuilding the financial system, and opening up to the global economy. In terms of monetary policy, moving from short-term interventions to a rules-based policy framework is imperative.
Reforms needed
Looking ahead, we aim to adopt an inflation targeting system, supported by institutional independence for the central bank in line with international standards, transparency in liquidity management, and improved data quality. Exchange rate stability has also become essential. Currency volatility distorts the economy, undermines investor confidence, and weakens policy effectiveness.
When it comes to rebuilding the financial system, Syrian banks must evolve from mere depositories into engines of lending and investment. This calls for comprehensive restructuring: strengthening capital adequacy standards, improving governance, and directing finance towards productive projects, particularly in infrastructure and the private sector.
Syrians among the rubble and damaged power lines in the Zabadani area in the Damascus countryside, Syria, May 18, 2017.
Regional banks from Saudi Arabia, Türkiye, and the United Arab Emirates have expressed preliminary interest in investing once sanctions are officially lifted, indicating a genuine appetite for financial engagement.
In terms of opening up to the global financial system, our domestic resources will not suffice for reconstruction. We need external capital flows from both the public and private sectors. To attract them, we must build a transparent investment environment that enhances investor protection and strictly combats money laundering.
International standards
Syrians abroad, with their expertise and capital, are key partners in this process. We are working on financial instruments that would enable them to participate without being exposed to the usual political risks.
A core pillar of the Central Bank of Syria's work now is to realign policies and procedures with globally recognised banking standards. The vision is to build an independent and effective monetary institution—one that embraces governance, transparency, and accountability frameworks, adopts Basel standards for risk management and capital adequacy, and implements internationally recognised accounting and supervisory systems.
Syria's Central Bank will work to realign policies and procedures with globally recognised banking standards
The aim is not only to improve domestic performance but also to enable the gradual and safe integration of the Syrian banking system into the global financial order by resuming relations with international banks, engaging in global payment networks, and attracting both direct and indirect investments. This integration is critical for boosting investor confidence, broadening the financing base, and supporting the reconstruction Syria so urgently needs.
Partners sought
We do not ask for donations or aid, but for partnerships based on mutual interests, because Syria's stability is not only a local matter—it is of regional and international concern. Isolating the Central Bank of Syria does not simply harm our economy; it contributes to uncertainty across the entire regional financial system.
In this context, we welcome any cooperation with international financial institutions such as the International Monetary Fund (IMF) and the World Bank, not only to secure funding but to build capacity, adopt best practices, and design realistic policies that take our complex circumstances into account.
The central bank will steer the course. Ultimately, the end of war alone is not enough to initiate recovery. We need credible, transparent institutions with forward planning capabilities. The lifting of sanctions is just the beginning. Success will depend on whether we, as Syrians, and our international partners, are willing to turn this opportunity into a genuine launching point for recovery.
