Currency crisis grinds Hasakah markets to halt

The crisis surrounding the replacement of old banknotes with new ones has deepened the stagnation in Hasakah’s markets, causing commercial activity to grind to a halt and basic commodity prices to rise significantly. Residents are facing growing difficulties as two exchange rates circulate and a number of official and service institutions refuse to accept old banknotes.

Siyar Mohammed, a resident of Hasakah, said the rise in commodity prices in the city was mainly linked to the currency replacement crisis and the refusal of some entities to accept old banknotes, particularly the 500- and 1,000-denomination notes.

Mohammed, who owns a chicken shop, added that a decision to halt imports, coupled with declining cash liquidity, had led to a sharp drop in market activity. Most residents, he said, do not have the new banknotes, while most of the cash in circulation remains in the old currency, further affecting prices and deepening the market slowdown.

He noted that the problem has begun to affect various sectors. Water tanker owners, for example, are being asked to pay in the new currency when purchasing water, while they are also required to pay in the new currency at fuel stations, leaving various businesses and services affected by the liquidity crisis.

Ali Al-Hassani, another resident, said markets were suffering from a severe shortage of new banknotes. Money changers were refusing to accept the old 500- and 1,000-denomination notes, which had also prompted traders to reject them from customers.

Al-Hassani explained that traders purchase some goods in US dollars, while the currency is exchanged at two different rates. The dollar is exchanged at around 13,000 when using the new currency, compared with around 15,000 when using the old currency. This has directly affected commodity prices and market activity.

He added that the short deadline set for replacing the old currency had increased pressure on residents and pushed up commodity prices. Traders cannot apply two different dollar exchange rates when selling goods, he said, ultimately passing the additional cost on to consumers.

Abdul Rahman Hassan, another resident, said the failure to inject sufficient quantities of the new currency into the city was one of the main problems facing residents. Bakeries, official institutions, hospitals and fuel stations are demanding payment in the new currency.

Hassan said residents were increasingly confused about what to do with the old banknotes, particularly given the limited number of currency exchange centers. He added that a single center was insufficient to meet the needs of the population.

He pointed out that the currency crisis had directly affected market activity, which is witnessing a state of stagnation and near-paralysis, while residents’ concerns are growing that the replacement deadline will expire before they can exchange the old currency they hold.

ANHA