Behavioral Factors Influencing Speculative Decisions on the Syrian Pound in Light of the Implementation of Monetary Reform and the Issuance of a New Currency

Abstract

This research aims to analyze the impact of behavioral factors on speculation decisions regarding the Syrian Pound among market participants, within the context of monetary reform and the issuance of the new currency in Lattakia Governorate. The study adopted a descriptive-analytical approach by administering a questionnaire to a simple random sample of 450 respondents among foreign exchange market participants in the city of Lattakia (including currency exchange shop owners, business owners, and financial professionals). Data were processed and statistically analyzed using (SPSS v.26).

The findings revealed that speculation decisions during the monetary reform phase were not purely the result of economic calculations, but were governed by specific behavioral biases. Perceived economic uncertainty reinforced herd behavior as a defensive mechanism to mitigate risk, while converting loss aversion from a conservative stance into a driver for rapid speculation to safeguard savings. Additionally, rumors acted as alternative facts in the face of scarce official sources, accompanied by overconfidence stemming from an illusion of control among traders. The study concludes by uncovering a behavioral paradox manifested in bounded rationality, where market participants integrate market influences and rumors into their individual decisions, transforming their conformity to the group into an illusion of autonomy and independent analysis. This explains the complex and turbulent dynamics observed in the foreign exchange market in Lattakia Governorate during that period.