IDLIB/ANKARA: Local authorities in northwest Syria are replacing the plummeting Syrian pound with the Turkish lira to shield their opposition-held region from economic collapse, an official said Monday. The Salvation Government – an administrative body linked to the Hayat Tahrir al-Sham group which dominates the Idlib region – already started paying wages and salaries in Turkish lira last month, said Bassel Abdul Aziz, who heads its economy department.

He said it has “instructed commercial traders and money exchange houses” to circulate low-denomination Turkish coins and banknotes to be used “for everyday transactions in liberated territories instead of the Syrian pound”. At a money transfer office in the province on Sunday, an AFP correspondent saw bags of Turkish lira coins on the floor alongside boxes filled with banknotes.

In a statement on Friday, the United Nations said a “large” shipment of Turkish currency had reportedly  entered Idlib on June 11. Syria’s economy has been battered by nine years of war compounded by a financial crisis in neighboring Lebanon, which had served as a conduit to bring dollars into government-held areas. The value of the Syrian pound has plummeted in recent days on the informal market, sending prices skyrocketing, shuttering shops and sparking rare anti-government protests in the country’s regime-held south.

At one point last week, the pound sank to 3,000 to the dollar, more than four times the official rate of around 700, and 60 times its pre-2011 rate. The spike comes ahead of the introduction of new US sanctions from June 17, and after the sudden fall from grace of tycoon and cousin of the president, Rami Makhlouf, that has left other top businessmen on edge.

“The Syrian pound will continue to circulate in liberated areas but its use will be reduced to a minimum,” the local official said. Under the new measures, the Salvation Government last week set the price for a loaf of bread at two Turkish lira (less than $1). An AFP correspondent said that gas stations on Sunday started to list their prices in Turkish lira.

Idlib is held by jihadist and rebel groups, many of them backed by Turkey, one of the main foreign protagonists in Syria’s war. Ankara has deployed forces in several military posts it established in Idlib as part of a 2018 deal with regime ally Moscow. Turkey also controls a stretch of territory along its border in neighboring Aleppo province following a series of military offensives since 2016. In these areas, the lira is already being used as the main currency instead of the Syrian pound in a sign of Ankara’s growing influence.

Meanwhile, Turkey and Libya’s internationally recognized government are discussing possible Turkish use of two military bases in the North African country, a Turkish source said on Monday, with a view to a lasting Turkish presence in the south Mediterranean. No final decisions have been made over possible Turkish military use of the Misrata naval base and the Al-Watiya air base, which was recently recaptured by the Turkish-backed Government of National Accord (GNA).

A more permanent air and naval presence in Libya could reinforce Turkey’s growing influence in the region, including in Syria, and boost its claims to offshore oil and gas resources. Turkey has also flagged possible energy and construction deals with Tripoli once the fighting ends.

The GNA has in recent months driven back Khalifa Haftar’s Libyan National Army (LNA) – supported by Russia, the United Arab Emirates, Egypt and France – turning the tide on a 14-month conflict that has displaced an estimated 200,000 people. While all sides say they want a truce, heavy clashes have emerged near the LNA-held coastal city of Sirte, which is close to major energy export terminals on the Mediterranean seaboard.

Russia and Turkey postponed high-level talks on Libya, scheduled for Sunday in Istanbul, due to discord over the GNA’s push to retake Sirte, another Turkish official said. “Turkey using Al-Watiya ... is on the agenda,” said the first source, speaking on condition of anonymity. “It could also be possible for the Misrata naval base to be used by Turkey.”

Turkey has a military base in Qatar and in 2017 added troops there amid a row between Doha on the one hand and Saudi Arabia, Egypt, the United Arab Emirates and Bahrain on the other. Ankara threw its support behind the government in Tripoli last year after the GNA signed a maritime demarcation accord that it says gives Turkish drilling rights near Crete, but that is opposed by Greece, Cyprus, Israel and the European Union.

A Libyan naval base in particular would “institutionalize” Turkey’s influence in the Eastern Mediterranean and give it leverage over Arab and European adversaries, said Galip Dalay, Fellow at Robert Bosch Academy.

Russia’s foreign ministry said on Sunday it was pursuing a “prompt ceasefire” and that Foreign Minister Sergei Lavrov would reschedule the meeting that was set for Sunday with his Turkish counterpart, Mevlut Cavusoglu. “A result was supposed to come out (of the meetings), but that stage could not be reached. There are issues where the two countries are on opposing sides,” the second Turkish official told Reuters. “One of the main issues for the postponement of the Lavrov visit is the (GNA’s) plan for an operation into Sirte...which has emerged as a target.”

The Kremlin did not comment on the postponement. Cavusoglu said on Monday it was unrelated to any issues on “core principles”. The United Nations said last week the warring sides had begun new ceasefire talks in Libya after GNA forces, helped by Turkey, repelled a protracted LNA assault on the capital Tripoli.

Sirte, about halfway between GNA-held Tripoli and LNA-held Benghazi, is the closest city to Libya’s main energy export terminals. Haftar’s forces seized the city in January and the conflict’s new frontline has emerged just to the west. “Russia wants Turkey and the GNA to halt military operations, particularly not attacking Sirte, Jufra and the oil crescent - and Ankara has rebuffed this demand,” said Dalay. “If Turkish-Russian talks don’t bear fruit, we might then see escalation both in Libya and in Syria’s Idlib region”, where Ankara and Moscow also back opposing sides, he said. – Agencies