August 30, 2013 5:15PM 

# The Syrian Pound Zigs and Zags 

By [Steve H. Hanke](https://www.cato.org/people/steve-h-hanke) 

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Following [U.S. Secretary of State John Kerry’s saber-rattling statements on the 26th of August](http://www.npr.org/blogs/thetwo-way/2013/08/26/215845759/2-excerpts-to-read-from-kerrys-speech-about-syria), the value of the Syrian pound (SYP) has zigged and zagged. Indeed, [the SYP lost 24.7% of its value against the U.S. dollar in the two days following Kerry’s announcement](https://www.cato.org/blog/troubled-currencies-project-update-syria-iran-egypt) (moving from 225 to 270 SYP/USD). Then, yesterday, we saw a sharp reversal in the course of the pound. Over the past two days, the SYP regained 25.58% of its value, bringing the black-market exchange rate back down to 215 SYP/USD. At this rate, the [implied annual inflation rate](https://www.cato.org/blog/syrias-annual-inflation-hits-200) is 209.85% (see the charts below the jump).

So, what caused the recent strengthening of the Syrian pound? We have to look no further than the eroding support for a U.S.-led strike against Syria. Yes, the United States has lost support from important allies, [the United Kingdom](http://timesofindia.indiatimes.com/world/middle-east/France-backs-action-on-Syria-as-US-seeks-coalition-UK-rejects-move/articleshow/22161820.cms), [Canada](http://www.thestar.com/news/canada/2013/08/29/syria_no_canadian_military_mission_planned_stephen_harper_says.html), [and Italy](http://www.reuters.com/article/2013/08/29/us-syria-crisis-italy-idUSBRE97S0OE20130829).

In addition, [Syrian authorities have cracked down again on black-market currency trading. In the past week, the authorities have shut down a number of currency traders; made “friendly” reminders to the public of the penalties of trading on the black market—imprisonment of 10 years and a hefty fine; and warned Syrians to stay away from “counterfeit” dollars that have supposedly been circulating](http://sana.sy/eng/24/2013/08/29/499935.htm). The authorities’ “get tough” policy followed [speculation that the SYP/USD rate would surpass the 300 mark](http://www.syriandays.com/index.php?page=show_det&id=36992).

*I have established a page to track current black-market exchange-rate and implied inflation data for the Syrian pound, as well as for troubled currencies in Iran, Argentina, North Korea, and Venezuela. For more, see: [The Troubled Currencies Project](https://www.cato.org/research/troubled-currencies-project).*

![Media Name: syp_usd_exchange_rate.png](/sites/cato.org/files/styles/pubs_2x/public/wp-content/uploads/syp_usd_exchange_rate.png?itok=L_FT8LOg) 

![Media Name: syria_annual_inflation_rates.png](/sites/cato.org/files/styles/pubs_2x/public/wp-content/uploads/syria_annual_inflation_rates.png?itok=hemP-syg) 

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