Syria's pound declines as prospects of U.S. military strike increases

Reports about an imminent U.S. strike against the backdrop of the Syrian government's alleged use of chemical weapons has caused panic in the Syrian markets and triggered off a new and sharp decline in the Syrian pound.

According to media reports, four U.S. Navy destroyers armed with land-attack cruise missiles are positioned in the Eastern Mediterranean Sea. All four warships are equipped with Tomahawk cruise missiles allowing the Pentagon to act rapidly if a military strike is ordered against Syria.

The U.S. and its allies are considering launching strikes on Syria in response to deadly alleged chemical attacks last week in eastern Ghouta in the countryside of Damascus, which allegedly claimed the lives of hundreds of Syrians.

The Syrian government and opposition groups have traded accusations about the use of chemical weapons. Syria has allowed an access for UN inspectors to probe the use of chemical weapons in eastern Ghouta.

The anticipated military strike has prompted Syrians to rush to market to buy foods and other necessities, with some Syrians complaining that foodstuff have started to disappear quickly.

The pound, which has been stable for nearly two months following the Central Bank of Syria's positive interventions in the markets, dived on Tuesday from 195 pounds against one U.S. dollar to up to 240 pounds in the black market.

The steep decrease prompted Adib Mayalleh, the governor of the CBS, to issue a statement calling on Syrians not to be deluded by the fake exchange rate of the dollar, noting that there is no demand on the dollar to justify surge.

Syrian Foreign Minister Walid al-Moallem also tried to placate the Syrians by saying that his country will use "all means available" to defend itself.

"Our defenses will surprise the world," Moallem said during a press conference on Tuesday, denying claims that his country had used chemical weapons.

"There is no country in the world that uses a weapon of mass destruction against its own people," Moallem said.

Syrian economic websites expected that the pound would further decline within the next few hours as political developments are accelerating in Syria.

People say that most of the exchange companies refuse to sell or buy dollars to people, noting that a few of them accept only to buy.

"No one will accept to sell you dollars at this delicate time," said Ahmed, a merchant. "They expect the exchange rate of the dollar to hike soon owing to the expected military strike."

"They have started talking about imaginary figures of up to 270 pounds per dollar," he said.

Even the CBS that sells 1,000 dollars for every citizen per month issued on Tuesday a decision decreasing the amount to 500 only.

The New York Times quoted a senior U.S. administration official as saying Washington was looking at NATO's aerial strikes in Kosovo in 1999 as a blueprint for action against Syria without a UN mandate.

Other media reports suggest that the air strikes against Syria will start as of Thursday.