What’s Next for the Syrian Pound ( Syrian Lira )? Revaluation Hopes Spark After Sanctions Lifted

After years of economic isolation and crippling financial sanctions, Syria finds itself on the edge of a new era. The May 2025 announcement that U.S. sanctions have been lifted has sent waves of cautious optimism through the country and the region. 

For the first time in over a decade, the Syrian Pound (SYP) has shown signs of strength, appreciating rapidly in black-market trading. This has left citizens, investors, and policymakers wondering: Is this the beginning of a long-awaited revaluation of the Syrian Pound? Or is it just a temporary bounce fueled by hope?

Let’s unpack the developments, challenges, and economic shifts shaping the future of the SYP.

Lifting of Sanctions

The decision to lift U.S. sanctions on Syria in May 2025 marks a significant milestone in the country’s post-conflict recovery. For over a decade, these sanctions isolated Syria from the global economy, restricting access to financial networks, trade partners, and foreign investment.  Sectors vital to economic stability—such as oil production, infrastructure development, and banking—were severely impacted, leading to economic stagnation and a collapsing currency.

With the sanctions lifted, Syria is now reconnected to key economic arteries. Commercial banking channels are gradually reopening, allowing smoother cross-border transactions. Regional players like the UAE, Iran, Turkey, and Russia are actively seeking to re-establish trade and diplomatic ties. 

It may result in a sudden boost in confidence, evident in the 25–30% appreciation of the SYP on the informal market within days of the announcement.

However, the path to lasting recovery will require more than optimism—it will depend on Syria’s ability to harness this momentum through investment, policy reform, and strategic rebuilding. The lifting of sanctions is not an automatic fix, but it opens a window for Syria to rewrite its financial story.

Impact on Currency Reserves and Foreign Investment

For many years, sanctions reduced Syria’s access to foreign currency. The Central Bank could not use normal financial channels, so it depended on remittances, informal exchanges, and unregulated sources to cover basic imports and public spending. These methods helped keep the economy going, but were not stable or reliable in the long term.

Foreign investment also came to a stop. Even countries that supported Syria could not provide much help because of legal and financial restrictions. Big projects and outside funding were put on hold, leaving little room for economic growth or development.

With sanctions removed, the situation is starting to change. Syria can now begin to rebuild its foreign currency reserves through trade, tourism, and international banking. Investors from nearby countries may return, bringing new money and business opportunities. The Central Bank has a chance to stabilize the currency and manage the economy more effectively. This moment creates a chance for fresh capital to enter the country and for financial trust to slowly return.

Currency Reserves

Foreign currency reserves are the lifeblood of any stable national currency. These reserves allow governments to intervene in the currency markets, stabilize the exchange rate, and finance essential imports like fuel, wheat, and medicine. The influx of trade revenue, foreign direct investment (FDI), and remittances from Syrians abroad can help rebuild these reserves.

The Central Bank of Syria has already hinted at renewed talks with the World Bank and the International Monetary Fund (IMF). These institutions had distanced themselves due to Syria’s non-compliance and debt obligations. However, debt clearance and renewed diplomatic engagement are opening the door for technical assistance, emergency funds, and long-term stabilization programs. With multilateral financial support, Syria could implement monetary reforms that anchor the Pound and limit inflation.

Foreign Direct Investment

Foreign investment usually avoids countries with high risk and instability. To bring in serious investment, Syria needs to fix several problems. While nearby countries like the UAE, Iran, and Russia might start investing early, money from the West will take longer. Western companies will wait to see real changes in how the country is managed.

• Transparency: Investors want to know the rules. They need clear information about taxes, business laws, and how problems will be handled if a dispute arises. If the system is confusing or unfair, investors will stay away.
• Infrastructure: Years of war have damaged Syria’s roads, power lines, water systems, and buildings. These problems make it expensive and difficult for companies to operate. To attract investment, Syria must rebuild and improve basic infrastructure.
• Banking Reform: Syria’s banking system needs to be updated. Right now, it does not meet international standards for safety, digital access, and money laundering prevention. To regain trust, Syria must clean up its financial system and make it easier for companies to move money legally and safely.

Will Exports Strengthen the Pound?

Before the war, Syria exported many goods. These included oil, gas, farm products like olives and citrus, clothing, and minerals like phosphates. But the conflict and years of sanctions badly damaged these industries. Factories shut down, and access to foreign markets was cut off.

Now, with sanctions lifted, Syria has a chance to restart trade. Strong exports could help strengthen the Syrian Pound (SYP) and support the economy.

• Oil and Gas: Oil and gas used to be the most important part of Syria’s economy. Restarting production will need foreign help, especially for technology and investment. Russian and Iranian companies are already showing interest in this sector. If Syria can get oil flowing again, it could earn large amounts of money from exports. This would help improve the trade balance and could push the Syrian Pound to rise in value.
• Agriculture and Industry: Syria has rich farmland that grows wheat, olives, cotton, and fruits. If trade routes reopen, these crops can be sold across the region again. Syria could become a reliable food supplier in the Middle East. Aleppo’s textile factories also have a chance to restart exports, especially if energy and transportation improve. In addition, Syria has valuable minerals, like phosphates. These could bring in more export money, but only if they are managed honestly and openly.
• Tourism and Services: Before the war, Syria welcomed many visitors. People came for religious sites, history, and even medical care. Cities like Damascus and Palmyra were famous tourist spots. Tourism could return, but it will take time. Roads, hotels, and airports need repair. If rebuilt properly, tourism could bring in money, create jobs, and support local businesses.

Central Bank Strategy

The Central Bank of Syria (CBS) plays a critical role in the Pound’s future. During the crisis, the CBS lost credibility, frequently intervening in the currency market with artificial rates that few respected. The result was a dual system: an official rate and a widely used black-market rate.

To foster long-term confidence, the CBS must now modernize its monetary policy tools.

Controlled Float: 

Letting the Syrian Pound (SYP) float completely on the open market could be too risky right now. Syria’s economy is still weak, and full market control might cause sudden price swings and instability.

A better option is a controlled float. In this system, the Central Bank sets a target range for the exchange rate but still allows market forces to influence it within that range. This gives the economy some flexibility while keeping things under control.

Key Policy Tools Needed

To make a controlled float work, Syria will need strong and smart financial policies. Here are the most important tools:

1. Inflation Targeting: Setting clear goals for inflation helps businesses and the public know what to expect with prices. It builds trust in the economy.
2. Liquidity Management: Banks need enough cash and credit to keep the economy moving. If banks can lend and people can borrow, confidence will grow.
3. Exchange Rate Unification: Right now, Syria has both an official exchange rate and a market rate. Bringing these two rates closer together—or making them the same—will show that the government is serious about reform and transparency.
4. Support from Global Experts: Following international best practices, especially with help from the IMF, could make the Central Bank of Syria more trustworthy. It would also help attract foreign investors and reassure trading partners.

Investor Speculation vs. Ground Reality

The recent rise in the Syrian Pound’s value is not only about real improvements in the economy. A lot of it is based on emotions, expectations, and market reactions to the lifting of sanctions. This kind of reaction is common when good news hits after years of crisis.

• The Risk of Speculative Bubbles: In economies like Syria’s, people often react quickly to hope. Some investors and traders—especially those abroad—may have quickly exchanged their U.S. dollars for Syrian Pounds, thinking prices would rise and they’d profit. Local markets may also react to rumors or overconfidence.

But if real progress in production, exports, and investment doesn’t follow, this rise won’t last. The Pound could fall again, making it even harder to build trust later.

• Currency Hoarding and Parallel Markets: For years, people avoided banks and used the black market to protect their savings, often keeping U.S. dollars at home. That habit won’t disappear overnight.

To stop this, the government and Central Bank need to act clearly and strongly. People must believe their money is safe in the official system. That means stable rules, good communication, and stopping illegal currency trading.

Final Word

The lifting of sanctions has breathed new life into Syria’s battered economy, and the Syrian Pound is finally showing signs of hope. But let’s be real—this is just the start of a long road ahead. For this momentum to turn into something real and lasting, Syria has to rebuild its foreign currency reserves, attract steady foreign investment, and get those export industries back on their feet. Plus, the Central Bank needs to step up with serious reforms to restore trust, not just from international partners, but from the people themselves.

The Pound’s future won’t be shaped by hope alone. It will require hard policy choices, cooperation with international institutions, and a commitment to rebuilding on transparent and inclusive terms.

It could become a powerful symbol—not just of recovery, but of a new chapter in Syria’s story. The time to build that future is now.