The United Nations: We are carefully reviewing a report on Damascus exploiting the exchange rate change to benefit from aid

The United Nations: We are carefully reviewing a report on Damascus exploiting the exchange rate change to benefit from aid
The United Nations: We are carefully reviewing a report on Damascus exploiting the exchange rate change to benefit from aid

The United Nations announced that it was “carefully reviewing” a US study in which it was stated that the Syrian government had exploited the “manipulation” of exchange rates to transfer at least $100 million in international aid to its coffers.

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The Associated Press quoted the leader of the United Nations resident team and the humanitarian coordinator for Syria, Francisco Galtieri, who resides in Damascus, that his office received a report on the study yesterday.

“We are reviewing it carefully, and we are also in the process of discussing it publicly in the coming weeks with our donors who are as concerned as we are about the impact of aid on the people of Syria,” he told the agency.

The agency said that the United Nations acknowledged today that “the fluctuations in currency exchange rates had a “relative effect” on the effectiveness of some of its programmes, especially since the second half of 2019 when the value of the Syrian currency declined.”

The authors of the study, which was published on Wednesday, said that the amount of lost aid and its transfer to the coffers of the Syrian government as a result of the depreciation of the national currency is likely to be more than $100 million over the past two years.

The data they used to calculate the amount was limited to United Nations procurement and did not include aid provided through other international aid groups, salaries, or cash assistance.

According to the study, the Central Bank of Syria, which is subject to US Treasury sanctions, assured international aid agencies to use its official exchange rate, which is about 1,500 Syrian pounds to the dollar, while the black market exchange rate reaches four thousand pounds to the dollar.

According to the study, the official exchange rate has since changed to about 2,500 pounds, leaving a gap of more than 30 percent, which it describes as “an automatic loss of about two-thirds of the aid money in exchange for the exchange rate conversion.”

The study says that United Nations agencies transferred $113 million in 2020 to purchase goods and services in Syrian pounds, i.e. transferring about $60 million of donor dollars at the unwanted exchange rate, according to the study.

According to the study, the dollars lost in 2019 are estimated at $40 million, bringing the total estimate to $100 million.

Galletiri said most of the UN’s aid is spent on purchases from international and domestic markets.

He added that for the aid spent in Syria, the United Nations and humanitarian partners negotiated a “preferential” exchange rate until 2021 to reduce the gap between the official rate and the black market rate and maintain the value of the aid. The preferential price changes according to informal market changes, Galtteri said.

The official exchange rate was revised last year to 2,500 pounds to the dollar, but that still represents a gap of more than 30 percent.

Source: “Associated Press”

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