For the first time in years, Syrians in major urban centers took to the streets this week in celebration as the Syrian pound (lira) recorded an unexpected gain against the US dollar, with exchange rates dipping below 7,500 to one. Street vendors and shop owners offered discounts and reported a surge in sales, while residents expressed cautious optimism—a stark contrast to the crisis-fatigued normalcy of the past decade.
This brief respite, while welcomed by a population battered by more than a decade of war, economic collapse, and international sanctions, is fraught with uncertainty. Analysts warn that the lira’s surge owes more to government interventions, temporary remittance inflows, and targeting of currency black markets than to structural economic improvements. Most citizens, despite celebratory scenes, are still burdened by daily shortages, high unemployment, and humanitarian insecurity.
Background: War, Sanctions, and Economic Freefall
Since the outbreak of civil war in 2011, Syria’s economy has all but collapsed. The Syrian pound lost over 98% of its value, and more than 80% of Syrians are reportedly living below the poverty line, according to United Nations figures. Hyperinflation has made basic goods—from bread to fuel—unaffordable for wide segments of society. The regime, led by Bashar al-Assad, has relied heavily on external support, especially from Iran and Russia, to maintain military and economic power.
International sanctions imposed by the United States and the European Union, most notably the Caesar Syria Civilian Protection Act in 2019, have further isolated Syria’s government. These measures are meant to curb the Assad regime’s resources for war and terror, but also limit humanitarian and development aid. The war economy has entrenched networks of corruption, black market trade, and dependency on foreign lifelines.
Iranian Influence and Regional Dynamics
Beyond immediate economic drivers, Syria remains at the strategic center of Iran’s regional ambitions. Iranian-backed forces, including the Islamic Revolutionary Guard Corps (IRGC), Hezbollah, and other associated militias, are deeply embedded throughout the country’s military, economy, and civil administration. Their presence is the result of Tehran’s long-term aim to establish a corridor connecting Iran to Lebanon via Iraq and Syria, thereby threatening Israel and Western interests.
Israel, meanwhile, continues to view Iranian entrenchment in Syria as an existential threat. The Israeli Defense Forces, under Chief of Staff Eyal Zamir, routinely target Iranian military assets and weapon convoys bound for Hezbollah, describing these actions as vital measures of self-defense. While Israeli officials refrain from publicizing operational details, defense strategies are informed by a broader understanding that Syrian economic and political trends cannot be divorced from the ambitions of Iranian proxies.
Life on the Ground: Acute Hardship Despite Currency Gains
The strengthening of Syria’s currency brings little substantive relief for most of the population. Salaries for government employees remain largely stagnant and insufficient to address daily needs. Fuel shortages, power cuts, and lack of medical supplies are persistent, and the price of essentials often exceeds even improved spending power. Humanitarian agencies estimate that fifteen million Syrians, both inside and outside government-controlled areas, are reliant on some form of aid.
Sanctions and crackdowns on informal markets have also led to widespread arrests and pushed many livelihoods further into the shadows. Many economic activities continue to be controlled by militia groups or regime-aligned businesses, limiting the potential for genuine recovery or reform. The reach of Iranian-backed groups fosters additional instability, including smuggling and the movement of arms and militants.
Security, Stability, and the International Response
The flight of capital and human resources from Syria, paired with foreign military and terror-linked activity, continues to destabilize the region. Illicit smuggling routes have emerged as critical arteries for Iranian-backed proxies to exert leverage. Israel’s security apparatus maintains a consistent policy of disrupting these routes to prevent strategic weaponry from reaching Hezbollah or other groups hostile to the Jewish state.
Diplomatically, few prospects exist for a negotiated settlement or sanctions relief absent meaningful change within Syria. The presence of foreign-backed militias, ongoing persecution of religious and ethnic minorities, and documented war crimes hinder prospects for international normalization. UN-sponsored ceasefire efforts and calls for the withdrawal of foreign fighters remain stalled, with little leverage against entrenched actors.
Broader Context: The War for Syria’s Future
This recent economic news, while welcomed by ordinary Syrians, is situated against a backdrop of ongoing conflict between Iran-led forces and those advocating for regional security and democracy. The Assad regime’s dependence on Iranian support is not merely economic; it is part of a deliberate strategy of regional destabilization, seeking to keep Syria within the so-called ‘axis of resistance’—an Iranian-led bloc that includes Hezbollah in Lebanon, various militias across Iraq, and the Houthis in Yemen.
For Israel, the lessons of the catastrophic October 7, 2023 Hamas massacre—which remains the deadliest antisemitic atrocity since the Holocaust—underscore ongoing threats from the Iranian network embedding itself across Israel’s borders. Israeli military actions in Syria are therefore widely understood as preemptive self-defense against a hostile build-up designed to engulf Israel from multiple fronts.
Conclusion
While Syrians seize the opportunity to celebrate a stronger national currency—a symbolic moment against years of hardship—the underlying forces driving Syria’s crisis remain: war, Iranian intervention, and economic isolation. Israel and its allies continue to monitor developments with the understanding that Syria’s fate is inseparable from the broader battle against Iranian-backed terror and instability in the Middle East. Any relief for Syria’s citizens remains fragile and reversible so long as these threats persist.
