Syria's banks, long-time pariahs in the global financial system, are expected to resume ties with international lenders within weeks, Syria’s central bank governor Abdulkader Husrieh told The National, a key development in the country's plan to reclaim a foothold in the global economy.
“We will not leave anyone behind. Generally, [local] banks will have their correspondent banks within the next few weeks,” he said.
Correspondent banking typically involves a local and a foreign bank acting as intermediaries for international transfers. It is a critical step for enabling transfers to and from Syria. These were almost entirely halted during the 14-year civil war, except for a few specific and tightly regulated cases.
Bankers in Syria told The National that discussions with their foreign counterparts were progressing well and some had already agreed to resume ties.
Mr Husrieh is seeking to woo big US lenders to forge ties with local partners and open representative offices in Syria, following US President Donald Trump’s decision in May to lift far-reaching sanctions on Syria's economy.
“It is impossible to overlook an economy that constitutes approximately 26.1 per cent of global GDP,” Mr Husrieh told The National, referring to the US.
Since the Bashar Al Assad regime was toppled in a lightning offensive led by Islamist rebel groups in December, Syria has sought to reintegrate into the global economy and rekindle its relationship with western powers.
In May, President Ahmad Al Shara, a former Al Qaeda-linked fighter turned statesman, met Mr Trump in Riyadh. The US President praised him as a “young, attractive guy … tough guy” with a “very strong past”.
Last week, Mr Husrieh held a virtual meeting with American and local banks, as well as US officials including Washington’s Syria envoy Thomas Barrack, in a bid to fast-track Syria’s return to the global financial system.
“We were clear in expressing our objective: to establish a fully-fledged relationship with the American financial sector,” Mr Husrieh said.
“The meeting went very well … it was the first such engagement after more than 50 years of practical boycott,” he added.
Process not 'one-time event'
Sanctions on Syria’s economy, including measures targeting the central bank, intensified after 2011 and Mr Al Assad’s violent crackdown on peaceful protests. These contributed to a steep economic crisis which has pushed one in nine people below the poverty line.
Reconnecting with the global financial system is a critical step for Syria to channel the billions in reconstruction funding that are set to flow into the war-ravaged country.
Experts and officials have welcomed the lifting of the most debilitating sanctions, while warning that complete economic recovery remains a long way off.
Specifically, observers stressed that the move does not mean foreign banks will automatically resume long-severed ties, citing concern over compliance and anti-money laundering regulations after years of isolation.
But Mr Husrieh said the Syrian financial sector is fully committed to adhering to international standards.
“Syrian banks presented their progress and current practices in Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) compliance,” he said.
“The central bank is fully committed to modernising its systems and aligning with international standards as part of our broader vision for reintegration,” he added.
Mr Husrieh said Syria's reintegration into the global economy was a “process” rather than a one-off event.
“The first milestone is the lifting of sanctions, followed by the establishment of correspondent banking relationships and the licensing of new financial institutions. This is not a one-time event but rather a continuous and phased process aimed at restoring Syria's full participation in the global financial system.”
Mr Husrieh has previously outlined his road map to The National, focusing on monetary and financial stability, attracting foreign deposits, establishing an independent central bank, and developing dynamic local financial institutions.
Mr Husrieh said regional uncertainty has not changed his country's vision for reforms. “While strategies may adapt to evolving geopolitical realities, our vision and objectives remain unchanged,” he said.
