Syria's new central bank chief pledges to boost bank independence post Assad: Reuters

Syria's new central bank governor, Maysaa Sabreen, said she wants to boost the institution's independence over monetary policy decisions, in what would be a sea change from the heavy control exerted under the Assad regime.

Sabreen, previously the Central Bank of Syria's number two, took over  in a caretaker role from former governor Mohammed Issam Hazime late last year.

She is a rare example of a former top state employee promoted after Syria's new Islamic rulers' lightning offensive led to President Bashar al-Assad's fall on Dec. 8.

"The bank is working on preparing draft amendments to the bank's law to enhance its independence, including allowing it more freedom to make decisions regarding monetary policy," she told Reuters in her first media interview since taking office.

The changes would need the approval of Syria’s new governing authority, though the process is at this stage unclear. Sabreen gave no indication of timing.

Economists view central bank independence as critical to achieve long-term macroeconomic and financial sector stability.

While the Central Bank of Syria has always been, on paper, an independent institution, under Assad's regime the bank's policy decisions were de facto determined by the government.

Syria's central bank, Sabreen added, was also looking at ways to expand Islamic banking further to bring in Syrians who avoided using traditional banking services.

"This may include giving banks that provide traditional services the option to open Islamic banking branches," Sabreen, who has served for 20 years at the bank, told Reuters from her office in bustling central Damascus.

"The bank wants to avoid having to print Syrian pounds because this would have an impact on inflation rates," she said.

Asked about the size of Syria's current foreign exchange and gold reserves, Sabreen declined to provide details, saying a balance sheet review was still underway.

Four people familiar with the situation told Reuters in December that the central bank had nearly 26 tons of gold in its vaults, worth around $2.2 billion, some $200 million in foreign currency and a large quantity of Syrian pounds.

The Central Bank of Syria and several former governors are under U.S. sanctions imposed after former Assad’s violent suppression of protests in 2011 that spiralled into a 13-year civil war.

Sabreen said the central bank has enough money in its coffers to pay salaries for civil servants even after a 400% raise promised by the new administration. She did not elaborate.

Reuters reported that Qatar would help finance the boost in public sector wages, a process made possible by a U.S. sanctions waiver from Jan. 6 that allows transactions with Syrian governing institutions.

Reuters