Syria Cuts Two Zeros From Currency To Revive Its Economy

Syria is preparing to launch a major change in its money system. The government will introduce new banknotes and cut two zeros from the Syrian lira. This plan comes after the removal of Bashar Al Assad in December, ending 14 years of war.

The lira has lost more than 99 percent of its value since 2011. Daily life has become difficult, with families carrying bags of cash just to buy food. The redenomination is meant to restore trust in the lira, make daily payments easier, and mark a new beginning for Syria’s economy.

Why the Syrian Lira Collapsed

In 2011, before the conflict, the lira traded at about 50 to the U.S. dollar. Today, it stands near 10,000 lira to the dollar.

This massive fall in value is due to war, sanctions, and corruption. Hyperinflation has left salaries worthless. Families often carry half a kilogram of 5,000-pound notes in plastic bags just to shop for a week.

Because of this, people no longer trust the lira. Many businesses use the dollar for their prices instead.

The Meaning of Redenomination

The redenomination will make transactions easier by cutting two zeros. For example, 10,000 lira will become 100 new lira.

But this move is not just about money. It also has political meaning. For decades, banknotes carried the images of the Assad family. The 2,000-pound note shows Bashar Al Assad, while the 1,000-pound note shows his father, Hafez Al Assad.

By introducing new designs, the government hopes to remove the old regime’s legacy and send a message of change.

The Central Bank’s Plan

According to documents reviewed by Reuters, the Central Bank of Syria told commercial banks in August about its plan. The goal is to “facilitate transactions and improve monetary stability.”

The meetings were led by Mokhles Al Nazir, deputy governor of the central bank. Officials have not yet spoken publicly, but bankers confirm that the plan is moving forward.

One main target is the 40 trillion lira that circulates outside the banking system. By redenominating, the central bank hopes to bring this money back under control.

Printing the New Banknotes in Russia

Syria has contracted with Goznak, a Russian state-owned company, to print the new notes. Goznak has printed Syrian currency in the past.

The deal was agreed during a Syrian delegation’s visit to Moscow in July. This shows how Syria’s new leaders continue to rely on Russia for support.

A New Economic Vision After Assad

The new government has promised to move toward a freer market economy. Restrictions on foreign currency use have been lifted. This is meant to attract investment, increase remittances, and support trade.

But in practice, the dollar dominates daily life. From supermarkets to fuel stations, prices are often shown in dollars, not lira. This creates a challenge for the central bank. Restoring confidence in the lira will not be easy.

The Dollar’s Strong Role

The lira has become so weak that Syrians calculate almost everything in dollars. For example, a family might spend $50 worth of lira at the store.

This practice undermines the central bank’s authority. It also reduces the lira’s value as a symbol of national strength.

The redenomination is designed to change this mindset. By making the lira simpler to use, the government hopes to win back trust.

What Economists Are Saying

Experts are cautious about the plan. Karam Shaar, a Syrian economist and U.N. adviser, says the move has strong political value. But he warns it may confuse ordinary people, especially the elderly.

He believes Syria could instead issue larger banknotes, such as 20,000 or 50,000 lira bills. These would make carrying cash easier without the cost of a full overhaul. A complete redenomination could cost hundreds of millions of dollars.

Even so, the government sees redenomination as a way to show progress and mark a fresh start.

The Problem of Cash Outside Banks

A big obstacle is the huge amount of money kept outside banks. Many Syrians do not trust financial institutions. Years of war, corruption, and sanctions pushed people to operate only with cash.

This has created a shadow economy, estimated at 40 trillion lira. Because of it, the state struggles to manage inflation and liquidity.

By issuing new notes, the central bank hopes to encourage people to deposit money in banks again. This would strengthen the financial system and help rebuild trust.

The Risks of Redenomination

Redenomination is not risk-free. It could create confusion about prices, wages, and contracts. Small businesses may have trouble adjusting.

There is also the danger of black-market exploitation. Currency traders could take advantage of the shift, making profits from gaps in exchange rates.

For the public, reactions will be mixed. Some will welcome the removal of Assad’s images, while others may worry about the real impact on daily life.

Will It Really Work?

The key question is whether redenomination can truly rebuild trust in the Syrian lira. On its own, the measure will not solve deep problems like unemployment, sanctions, or corruption.

But it could be a first step in a wider package of reforms. If the government can stabilize prices, encourage investment, and build transparency, people may slowly regain confidence in the lira.

Without consistent follow-up policies, the new notes may remain just a symbolic gesture.