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Collapse of Syrian Pound Echoes Across Jordan

RAMTHA, Jordan — In this tranquil border town, the civil war being fought in neighboring Syria is never very far away.

Not only do the residents hear sounds of the gun battles between the Syrian army and defectors in the nearby town of Deraa and cope with a swelling population of refugees, they are also feeling the impact of the plunging Syrian pound.

The 40% drop in value of the pound over the last year should be good news for Jordanian traders, enabling them to pay less for the goods they bring across the border. But it hasn’t worked that way: The sharp depreciation of the currency has caused Syrian suppliers to cut back on the quality of the products they ship to Jordan and in many cases to cut off the supply altogether.

“The drop in the Syrian pound is a double-edged sword. While we could buy more Syrian products in theory, few products are available and the quality has been compromised,” says Abu Ahmed, who runs a wholesale business in Ramtha, selling his Syria imports to retailers across Jordan.

It’s traders like Ahmed who are feeling the impact now. But the plunging Syrian pound could spell even bigger trouble for Jordan in coming months by prolonging the civil war and driving more Syrian refugees over the border, which is already home to some 80,000 displaced Syrians.

 That would add immeasurably to the pressures King Abdullah, a key ally of the U.S. in the Middle East, is feeling as he tries to balance growing pressure for political change with powerful interest groups determined to maintain the status quo amid stalling economic growth.
http://www.themedialine.org/news/news_detail.asp?NewsID=34782 [2]