Syria plans currency redenomination as Lira loses 99% of its value

Dubai: Syria is set to issue new banknotes and slash two zeros from its embattled currency in an effort to restore confidence in the lira, which has lost more than 99 percent of its value since the start of the war in 2011, according to multiple sources and documents reviewed by Reuters.

The move aims to stabilize the economy following the ouster of Bashar Al Assad in December, ending 14 years of conflict that devastated Syria’s economy and society. 

The redenomination will not only help ease daily transactions but also symbolically erase the legacy of the Assad family, whose portraits currently adorn the country’s banknotes. 

The 2,000-pound note features Bashar Al Assad, while the 1,000-pound note carries the image of his father, Hafez Al Assad.

Currently, the lira trades at about 10,000 to the U.S. dollar, compared with 50 before the war. 

Families shopping for basic groceries often carry half a kilogram or more of 5,000-pound notes stuffed into plastic bags just to cover their weekly needs.

The new banknotes will reportedly simplify everyday payments and reduce the volume of cash needed for routine purchases.

According to a central bank document seen by Reuters, commercial banks were informed in mid-August that the Central Bank of Syria intends to introduce new currency with “deleted zeros” to facilitate financial transactions and improve monetary stability. 

Meetings were led by Mokhles Al Nazir, deputy governor of the central bank, though officials have declined to publicly comment, citing confidentiality. 

Three banking sources said Syria has contracted with Goznak, a Russian state-owned company, to print the new banknotes, following an agreement reached during a high-level Syrian delegation’s visit to Moscow in late July. Goznak has previously printed Syrian currency during Assad’s rule.

Syria’s new leadership has pledged to move toward a freer market economy and has lifted long-standing restrictions on the use of foreign currencies. 

In practice, however, the dollar dominates transactions, with prices posted in dollars across shop windows, fuel stations, and even local markets. Bankers say one motive behind the currency reform is to address an estimated 40 trillion lira circulating outside the formal financial system, undermining state control over liquidity.

Economists, however, remain cautious. Karam Shaar, a Syrian economist and U.N. adviser, said removing zeros and replacing notes bearing the Assads’ portraits carries strong political symbolism but may create confusion among consumers, particularly the elderly. 

“Instead, Syria could issue higher denominations, like 20,000- or 50,000-pound notes,” he said. “That would achieve similar goals in easing transactions and cash storage, while avoiding the massive costs of a full currency overhaul, which could run into hundreds of millions of dollars.”