The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) has warned that exchange rate instability in Syria is directly and negatively affecting the total value of humanitarian assistance provided to affected populations.
In its latest report, the UN office noted that the ununified fiscal policies and inconsistent banking practices of the Central Bank of Syria are causing the loss of significant financial resources that were earmarked for financing basic relief operations in the country.
Estimating the size of financial losses
These financial losses due to exchange differences are estimated at between US$30,000 and US$50,000 for each humanitarian aid or grant programme with a total value of US$1,000,000, OCHA said. These indirect deductions reduce the capacity of international organizations to cover the growing needs and provide basic goods to beneficiaries.
Sharp decline in purchasing power
A specialized survey conducted by the Cash Working Group in Syria showed that the persistent gap between officially imposed exchange rates and real market prices is leading to a decline in the purchasing power of humanitarian and cash assistance by up to 25%.
This sharp drop means that a quarter of the actual value of aid is disappearing before it reaches the targeted families, deepening the food and livelihood security crisis.
International Claims with a Stable Financial Framework
The joint UN report called on the Central Bank of Syria to urgently intervene to adopt a clear financial framework and formulate a stable and predictable mechanism for the foreign exchange transactions of humanitarian organizations. The UN stressed that this action is a key pillar to preserve the true value of donor funds, and ensure that they are fully accessible to enhance the efficiency of the delivery of life-saving humanitarian assistance to those who deserve it without exhaustion.
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