By Timour Azhari
DAMASCUS (Reuters) – The vault of Syria’s central bank contains nearly 26 tons of gold, the same amount at the start of the bloody civil war in 2011, even after the chaotic fall of Bashar al-Assad’s despotic regime, four people said with the situation told Reuters.
But the country has only a small amount of foreign currency reserves in cash, the same people said.
Syria’s gold reserves stood at 25.8 tons in June 2011, according to the World Gold Council, which cites the Central Bank of Syria as a data source. According to Reuters calculations, that is worth $2.2 billion at current market prices.
However, the central bank’s foreign exchange reserves amount to only about $200 million in cash, one of the sources told Reuters, while another said U.S. dollar reserves were “in the hundreds of millions.”
Although not all reserves would be held in cash, the decline is significant compared to before the war. According to the International Monetary Fund, Syria’s central bank reported $14 billion in foreign reserves at the end of 2011. In 2010, the IMF estimated Syria’s foreign reserves at $18.5 billion.
Dollar reserves are near depletion as the regime increasingly used them to finance food, fuel and Assad’s war effort, current and former Syrian officials told Reuters.
Media representatives for Syria’s new ruling government and for the Central Bank of Syria did not respond to Reuters requests for comment on the size of the central bank’s reserves.
Syria stopped sharing financial information with the IMF, World Bank and other international organizations shortly after the Assad regime crushed pro-democracy protests in a 2011 crackdown that spiraled into civil war.
Syria’s new government, led by former rebels, is still taking stock of the country’s assets after Assad fled to Russia on December 8. Looters briefly gained access to parts of the central bank and took Syrian pounds, but did not hack into the main vault. Reuters reported this.
Some of what was stolen was then returned by Syria’s new rulers, Syrian officials told Reuters.
The safe is bombproof and requires three keys, each held by a different person, and a combination code to open, one of the sources said.
The vault was inspected last week by members of Syria’s new government, two sources said, days after rebels took control of the Syrian capital Damascus in a lightning offensive that ended more than 50 years of Assad family rule.
Led by the Hayat Tahrir al-Sham group, a former al Qaeda affiliate that has long disavowed these ties, the new government has quickly formed a government and is consolidating control over state institutions.
Reuters had no access to the central bank vaults.
BACK TO WORK
The central bank’s headquarters, a wide white building in the center of Damascus, fully reopened on Sunday, the first day of the working week in Syria.
The area was teeming with workers and people looking for dollars, while others carried bags full of Syrian pounds.
In addition to its meager US dollar reserves, the Syrian central bank can currently count on several hundred million dollars in Syrian pounds in its reserves, a source said.
The inflow of new foreign exchange declined as Syria lost its main source of foreign income, crude oil, as Kurdish fighters and other armed groups seized fields in the country’s east over the course of the war.
Syria is also the target of tough Western sanctions, and the United States has sanctioned the central bank itself and blacklisted some of its governors.
But the sources familiar with the situation told Reuters that the gold was never liquidated to maintain sufficient collateral for the Syrian pounds circulating on the market.
Syria’s local currency has fallen from about 50 pounds to the dollar before the war to about 12,500 pounds as of Monday.
Syria’s new government has demanded the lifting of international sanctions to revive the economy, rebuild the country after years of war and encourage millions of Syrian refugees to return.
But U.S. and European officials have said they will have to wait and see what kind of governance the country’s new Islamist rulers will establish.
(Reporting by Timour Azhari, Writing by Libby George, Editing by Lisa Jucca)
