On reinforcing investor confidence by developing a functioning interbank market and deepening financial intermediation
To what extent are international precedents and multilateral guidance informing Syria’s reform roadmap and the sequencing of structural changes?
ABDULKADER ALHUSSRIEH: We are learning from international experiences and being advised on implementation by the IMF. These precedents underline the importance of sequencing reforms carefully, maintaining transparency and ensuring public trust. Our approach will reflect Syria’s specific context but adhere to these guiding principles. In addition, as liquidity remains a concern for investors, we are launching a banking sector rehabilitation programme to strengthen liquidity and improve asset quality, with the aim of restoring confidence in the banking sector. The objective is to ensure banks can support both investment and household credit as the economy stabilises.
How has financial sector stabilisation been approached since the change in government in 2025?
ALHUSSRIEH: Since January 2025, the government’s primary focus has been on restoring stability and rebuilding confidence in the Syrian pound while laying the groundwork for broader financial sector rehabilitation. We implemented a coordinated stabilisation plan that combined tighter monetary policy with improved transparency in the foreign exchange market and closer coordination with fiscal authorities. These actions have been essential in containing volatility, narrowing the gap between official and parallel exchange rates and restoring confidence in monetary policy. Inflation is showing clear deceleration, while the Syrian pound has appreciated 30-35% since liberation and in mid-2025 was regarded as stable. It is important to note that earlier currency figures relate to the pre-liberation period when macroeconomic distortions were at their peak. Fiscal discipline remains a cornerstone of our stabilisation strategy. Moving forwards, the most effective policy tools will include open market operations, targeted liquidity absorption and the establishment of a clearly defined interest rate corridor – all underpinned by transparent and consistent communication to help anchor inflation expectations and reinforce public and investor confidence. In terms of mechanisms to sustain this rehabilitation, we are pursuing several complementary measures. A key focus is the development of a functioning interbank market to improve short-term liquidity management across the system, which will enhance the efficiency of monetary transmission and deepen financial intermediation. At the same time, we are assessing the introduction of recapitalisation tools to strengthen bank balance sheets and rebuild capital buffers where necessary. Another important step is the establishment of a national asset management company tasked with handling non-performing loans in public sector banks. This will help restore asset quality, free up lending capacity and position the financial sector to better support productive investment and credit to households and businesses.
What regulatory steps are being taken to ensure Syria’s banking system can attract investment while reconnecting to global payment systems?
ALHUSSRIEH: We are upgrading our banking super-vision framework with assistance from our technical partners and introducing regulations aligned with Basel III standards. In addition, we have strengthened anti-money-laundering and counterterrorism financing compliance to meet international norms. On the infrastructure side, we are upgrading our payment systems, retraining compliance teams and engaging with international partners to revalidate correspondent banking links and restore full Society for Worldwide Interbank Financial Telecommunication connectivity. In parallel, we are developing bilateral and regional payment arrangements with key trading partners, including Arab and Eurasian systems. We are also exploring local currency settlement platforms to sustain trade and financial continuity as global reintegration advances.
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