Syria issues first letter of credit in 14 years – for Saudi Aramco oil deal
Syria's central bank has opened a letter of credit through a major US bank for petroleum supplies from Saudi Aramco. Damascus sees it as a return to the formal banking system.
Archive image · Photo: Michael Rostom / Wikimedia Commons, CC BY 2.0 (cropped and resized)
Syria's central bank said on Sunday it had issued its first letter of credit in 14 years. It backs a petroleum products supply deal between the state-owned Syrian Petroleum Company and Saudi Aramco. The transaction was arranged through a major US bank, which the central bank did not name. According to The Jerusalem Post, the central bank said the deal opens a channel to finance oil imports and settle payments through the formal banking system. State news agency SANA called it "a landmark financial transaction".
A letter of credit is a bank's payment guarantee commonly used in foreign trade to protect sellers against non-payment. The move is seen as a further sign that Syria is regaining access to international banking channels after the lifting of US sanctions. According to SANA, the deal followed a meeting in New York on 5 October, where central bank governor Safwan Raslan discussed practical operations and account management with US Federal Reserve officials.