Tajik Central Bank Halts Direct Selling of Foreign Currencies
Saturday 14 March 2015
DUSHANBE (Asia-Plus) – The National Bank of Tajikistan (NBT) announced tough controls on dollar sales in a bid to shore up its battered national currency the somoni. NBT) stops the direct selling of the foreign currency to population due to confusion at the currency exchanges offices, the first deputy head of Tajik central bank, Jamshed Yusufiyon (جمشید یوسفیان), announced at a news conference in Dushanbe on March 13.
Tajikistan’s economy is heavily dependent on Russia, with almost half of its gross domestic product (GDP) coming from remittances sent mainly from people working in. Russia’s economy has been severely affected by the concomitance of Western sanctions over Ukraine and falling oil prices, causing the ruble to lose around half of its value last year.
Consequently, in recent weeks, long queues have spilled out of exchange bureaus in Dushanbe as people lose faith in the national currency which fell 11% against the dollar in 2014 and 4.0% since the start of this year, according to official exchange rates.
According to Yusufiyon, additional currency injections into the cash market will be carried out through commercial banks. “We want to make availability of the foreign currency wider. I hope these measures will work”, the NBT deputy head said. “To avoid monetary speculation the NBT on March 12 held a meeting with senior representatives of commercial banks,” said Yusufiyon, adding “A relevant agreement was signed with them.”
Tajik central bank will monitor the process and take further necessary steps, he noted, adding that the NBT is making interventions every day. The daily intervention amount reportedly ranges from $1.5 mln to $3 mln depending on the market demands.
According to data from Tajik central bank, the somoni lost more than 10% of its value against the dollar since the beginning of the year. The value of TJS has continued to depreciate against USD over the past week, registering an average market purchase rate of the dollar against the somoni 1:6.3975 on March 13, up from 1: 6.1650 on March 6.
Yusufiyon noted that the NBT is not going to let the Tajik national currency, the somoni (TJS), go free floating. “We will not curb the exchange rate but we will control in order to avoid sudden changes in the exchange rate,” he said.
Yusufiyon attributed the current situation in the country’s currency market to complication of political situation in the region as a result of which the West imposed sanctions on Russia, which is one of the major trading partners of Tajikistan.