Black Friday is Now! Don’t miss out on up to 60% OFF InvestingProCLAIM SALE

Falling lira hits Syrian enclave backed by Turkey

Published 28/08/2018, 12:32
© Reuters. FILE PHOTO: Turkish lira banknotes are pictured at a currency exchange office in Istanbul

By Khalil Ashawi

AZAZ, Syria (Reuters) - In a part of northern Syria that Turkey's army helped rebels capture in 2016, the plunge in value of the Turkish lira has hit shopkeepers, medical charities and fighters paid in the currency hard.

Turkey has turned from its military role in the rebel-held strip in Syria, that runs along its border between the towns of Afrin and Jarablus, to a longer-term one of stabilisation, entwining the area's economy with its own.

It has funded health and education services, trained local police and more recently joined insurgent factions together into a new armed force.

For those employed by Turkish-backed authorities and paid in lira, including security forces, an international sell-off of the currency, resulting in it losing around 40 percent of its value to the dollar so far this year, has brought new hardship.

The lira has also plunged in value against Syria's official currency, the Damascus-minted Syrian pound.

"The lira was strong in the Syrian territories until two months ago, when it started to lose its strength gradually," said Mohammed Hadi Hassano, 25, speaking in his exchange office in the city Azaz, just a few kilometres from the Turkish border.

"800 lira was equal to 100,000 Syrian pounds back then. Today the same amount is equal to only 40,000 pounds."

The lira began to weaken rapidly amid concerns over Turkish President Tayyip Erdogan's influence on monetary policy, but was driven to record lows over a dispute between the United States and Ankara.

The dispute centres on the fate of a U.S. Christian pastor detained in Turkey on terrorism charges, and which saw Washington slap tariffs on some Turkish imports.

The Turkish lira's volatility is a new illustration of how the involvement of regional or global powers in Syria's fractured warscape can change things for people on the ground.

Besides Turkey, Iran, Russia and the United States each have forces deployed in Syria as well as providing other forms of support in territory held by their allies.

"When the Turkish lira began to lose value against the Syrian pound our salaries became worthless," said Ghassan Kinno, 23, a fighter with a Free Syrian Army rebel faction in Azaz.

"The fighter receives his salary and goes to the market... and it's barely enough for one week. This is the reality we are witnessing now. The situation is very difficult and there is no solution," he said.

Another man paid in Turkish lira in Azaz is Mohammed Sheikho, 53, who works for a medical relief organisation.

"I lost an amount of nearly $100 dollars from my (monthly) salary. Who will compensate me for this loss? The merchants who are now raising prices? Or the organisation paying my wages?" He said. His salary was previously worth about $525 a month.

Local political and military realities mean the lira and its fluctuations may continue to play an important role in Azaz.

© Reuters. FILE PHOTO: Turkish lira banknotes are pictured at a currency exchange office in Istanbul

"What is better for us is to be paid in Syrian pounds since we are spending our money in the Syrian territories. But in the end we have to abide by the rules of the side that supports us," said Kinno.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.