The official rate of the Tajik national currency lost 11.2% of its value against the dollar between December 31 and February 29, according to the latest figures from the Tajik National Bank’s website. The rate went up to TJS7.87 to the dollar from TJS6.99 on December 31.

The decrease in remittances from Russia, which is the primary source of foreign currency in Tajikistan, and in trade with neighbouring countries are the main reasons for the depreciation. Remittances decreased by 33.3% y/y in 2015, while foreign trade declined by 18% y/y, according to figures from the National Bank of Tajikistan. Like other regional currencies, the somoni is under pressure to devalue to catch up with the depreciation rates of the Kazakh tenge and Russian ruble, which lost about 50% of their value since the price of oil fell below $100 per barrel in autumn 2014.

Restrictions imposed on exchange operations by Tajik authorities led to the creation of a black currency market in Tajikistan last autumn. Currency dealers in the country were changing cash dollars at TJS7.9 to the dollar on the black market at the beginning of March as the black market rate of the somoni appreciated throughout February from TJS8.75 to the dollar seen at the end of January, according to a report by Ozodagon news agency from March 1.

Due to the constant weakening of the somoni against the greenback, Tajik savers tend to opt for savings in foreign currency, mostly in dollars. At the beginning of November, the central bank lifted the requirements for banks to set limits on foreign currency deposits by resident and nonresident individuals and require individuals to own documentation explaining the sources of foreign currency in their possession, the bank said in a statement on November 9. The bank lifted the regulations as part of an overall goal to reduce the circulation of “illegal” foreign currency in the country’s economy as well as the creation of favourable conditions in the country for attracting domestic capital to the economy.