In this interview yesterday, I shared my opinion on several points regarding the Syrian pound and the future of monetary policy.

Many believe that a strong Syrian pound indicates a strong economy and should return to its 2011 levels. This notion is incorrect. If it were true, Kuwait’s economy would be 500 times stronger than Japan’s based on the exchange rate of the Kuwaiti dinar against the Japanese yen.

In my view, sound monetary policy for Syria should generally be based on five several key principles, including:

1- Adopting a single exchange rate: I do not support multiple exchange rates, despite their potential short-term benefits in emergency situations. Over the long term, they encourage corruption, create confusion, and foster the growth of parallel markets, as we have seen in many countries such as Syria, Lebanon, Iran, Venezuela, and other economically failing states.

2- Establishing a fair exchange rate for the Syrian pound: The exchange rate should broadly reflect the currency’s purchasing power, and the market is the most reliable indicator of fairness.

3- Maintaining a relatively stable exchange rate: A stable rate enables business and investment planning. This can be achieved through central bank intervention in the market in cases of significant exchange rate volatility (managed floating regime).

4- Promoting economic growth in line with available resources (potential output): This involves adjusting the money supply—either increasing it to stimulate the economy in cases of recession or reducing it to curb inflation when it exceeds acceptable limits (generally around 2% annually, as targeted by most central banks in developed countries).

5- Allowing the free circulation of other currencies: I do not believe in criminalizing the use of foreign currencies. However, the currency exchange profession must be regulated to limit illegal activities and tax evasion. The local currency naturally becomes the primary medium of exchange in the country because it is the only currency accepted by government institutions.