A D-Metric Analysis of the denomination structure of the Syrian Pound

الملخص

The high reliance on cash combined with the rising inflation levels that Syria has experienced in recent years, led the Central Bank of Syria to put into circulation the SP2000 and SP5000 banknotes in years 2017 and 2021 respectively. Rumors are now circulating that the SP10000 will be issued and put into circulation very soon. Higher denominations of the Syrian Pound were not issued since 1997 when the SP1000 was introduced. This study aims to investigate whether the introduction of the SP1000, SP2000 and SP5000 banknotes was appropriate and done on the right timing and whether a higher banknote must be issued. To do so, the study uses the D-Metric model to analyze the changes in the denomination structure of the Syrian Pound during the period 1997 to 2022. The findings of the D-Metric model reveal that the introduction of the SP1000 was premature and should have been postponed until year 2005. The introduction of the SP2000 and SP5000 notes however was consistent with the predictions of the D-Metric model. The findings also reveal that it is appropriate to introduce the SP10000 since year 2020 and that the introduction of the SP20000 should not be pushed beyond year 2024.