Syria

Syria initially operated under multiple direct controls with a nationalised and subordinate banking system, before embarking in the late 1980s on an erratic and reluctant process of liberalisation. That process became more serious in the mid-2000s, but progress was halted and reversed in the years of conflict from 2011.

Years Targets and attainment Classification
1974-87 exchange rate unified 1973 and fixed versus USD, with occasional adjustments, foreign trade heavily regulated with varying use of import compression; banking system (and much of industry) nationalised and consolidated from mid-1960s, mainly involved in lending to public sector enterprises; special role for Commercial Bank of Syria, which acts as government’s banker and fiscal agent (while central bank’s role is more limited); monetary policy passive, mainly directed through credit ceilings or guidelines, interest rates rarely changed, monetary growth dominated by lending to government and nationalised sector and varying official capital inflows used to finance fiscal deficits, within context of ambitious development planning with price and other controls, plus varying but relatively low level oil production and export; growing parallel forex market from 1977, initially tolerated; rising balance of payments deficits, inflationary pressures and parallel market premium lead to intermittent fiscal tightening, plus official attempts to control parallel market from 1980-81, with additional forex market rates introduced 1982, 1985, 1986; (genuine) parallel market grows with rising premium; statistical database poor, especially with regard to public sector enterprises multiple direct controls MDC
1988-2003 1988 major attempt to rationalise forex arrangements, including large devaluation of official rate and short-lived reduction of number of additional rates, followed by further tentative moves towards eventual exchange rate unification and liberalisation; serious but only piecemeal and halting efforts at fiscal stabilisation and wider liberalisation, including of trade and prices; wider reform process runs out of steam by late 1990s; monetary growth remains passive, dominated by government and public sector operations (including bank loans to cover losses of public enterprises) and variations in net foreign assets, monetary policy formulated in terms of sectoral credit plans; 1998 unification of almost all exchange rates, at level close to parallel market, but separate public and private pools of foreign exchange; 2001 private banks allowed; statistical database remains poor unstructured discretion UD
2004-10 renewed reform impetus with reform programme late 2003, interest rates reduced and made less inflexible; reserve requirements and administered interest rates varied more often, but still no indirect monetary instruments; January 2007 public and private forex pools and rates unified, rate managed tightly against USD, to provide nominal anchor in continued absence of indirect monetary instruments; de jure peg from August 2007 to SDR, but de facto peg basket seems to have higher weight on USD than SDR; statistical database remains poor loosely structured discretion LSD
2011-17 [Note: no Article IV reports after 2010]

political and then military conflict from 2011 leads to rises in fiscal deficits and debt, with high but variable monetary growth, and to depreciation and inflation, falls in GDP and widening of trade deficits despite renewed controls on foreign trade; fall in quality and coverage of statistics

[tentative] unstructured discretion UD

Selected IMF references: RED 1975 pp20-1, 34-5; SR 1976 pp3-7; RED 1977 pp27-8, 39; RED 1978 pp34, 48-9; RED 1980 pp49-50; RED 1981 pp24-5, 38-40; SR 1981 pp10-11; SR 1982 pp3, 9; RED 1986 pp50-4; RED 1987 pp34-5, 55; RED 1990 pp42-3, 56-9; SR 1991 pp2-3, 18-19; RED 1993 pp32-3, 49-52; SR 1995 pp13-14; RED 1996 pp1-2, 37, 54-5; SR 1996 pp1-2, 4-8; SR 1997 p31; SR 1998 pp21, 29; SR 1999 pp8, 10; RED 2000 pp45-6, 61-3; SR 2000 pp11, 14-15, 17-18; SR 2001 pp25, 27-8; SISA 2003 pp31, 49-56, 61-2; SR 2004 pp13-15; SR 2005 p22; SI 2006 pp29-37; SR 2007 pp11, 19-20; SR 2008 p10-11; SR 2010 pp6, 16;

Additional references: Gobat and Kostial (2016); World Bank (2017).

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