Syria is trying to sell gold reserves to raise revenue as Western and Arab sanctions targeting its central bank and oil exports begin to bite, diplomats and traders said, according to Reuters.
Western sanctions have halved Syria’s foreign exchange reserves from about $17 billion, French Foreign Minister Alain Juppe said on Tuesday, April 17 after a meeting with about 60 nations aimed at coordinating measures against President Bashar al-Assad’s government.
“Syria is selling its gold at rock bottom prices,” said a Western diplomatic source, declining to say where it was being sold. A second diplomatic source confirmed the information, adding that Damascus was looking to offload everything it could to raise cash, including currency reserves. On February 27, the European Union agreed more sanctions including prohibiting trade in gold and other precious metals with Syrian state institutions, including the central bank.
Two gold traders in the United Arab Emirates said the Syrian government had been offering gold at a discount, with one saying it was making offers at about 15 percent below the market price. The World Gold Council estimates Syria had about 25.8 metric tones of gold as of February 2012, representing about 7.1 percent of its total reserves.
At Wednesday’s spot prices, Syria’s total gold reserves are worth around $1.36 billion. Around $33.8 billion worth of gold is cleared through London on a daily basis.
Diplomatic sources estimated the sanctions had cut Syria’s oil output by 30 percent, costing Assad’s government $400 million a month in revenue, or $2 billion since November. Prior to EU sanctions, Damascus sold 90 percent of its oil to Europe.
The Syrian pound hit a record low on the black market in March of around 100 to the dollar, compared to 47 before the protests erupted, sharply raising the cost of imports.