Syria's central bank executes first US-bank letter of credit in 14 years

The Central Bank of Syria announced on Sunday, 11 October, that it had executed its first letter of credit through a major US financial institution in 14 years. The credit was opened for the Syrian Petroleum Company to carry out a petroleum products supply deal with Saudi Aramco, according to the bank's statement carried by SANA.

The bank said the step creates a direct channel for energy deliveries to the local market. It described it as a critical shift toward re-establishing official banking channels for strategic trade, and said it provides a reliable settlement and financing structure for national fuel imports.

A letter of credit is a bank's undertaking to pay a seller once agreed shipping and documentary conditions are met, and importers need one to buy on commercial terms through the banking system. Reuters, citing the bank's statement, reported that the transaction was arranged in coordination with a major US bank, which was not named.

The central bank did not disclose the value of the deal, the volume of petroleum products or a delivery schedule. No statement from Saudi Aramco or the US institution involved has been reported.

The announcement follows a meeting in New York on 5 October between the central bank governor and officials of the US Federal Reserve Bank, who discussed practical operations and account management between the two institutions. This is one completed transaction, not evidence that letters of credit are generally available to Syrian importers.