Tajikistan to issue ruble remittances in local currency

By bne IntelliNews February 4, 2016

The Tajik National Bank ordered the country's credit institutions to convert ruble transfers to Tajik somonis starting on February 2, news agency Asia-Plus reported on February 3. The regulation does not apply to ruble transfers by bank account holders.

The bank claims that the regulation will help support the somoni, proping up its exchange rate. The authorities are attempting to minimise currency exchange activities on the country’s black market. In January, Tajik President Emomali Rahmon ordered the authorities to set up more bank-affiliated exchange offices around the country to provide alternatives to illegal exchange offices. The black market rate of the somoni diverged to TJS7.6 to the dollar from the official rate of TJS6.72 on November 30 following the central bank’s decision to shut down all private exchange offices across the country and limit foreign exchange operations to banks and credit institutions. The bank’s new regulation does not so far apply to transfers in any foreign currency except the ruble.

On January 28, currency dealers were changing cash dollars at TJS8.75 to the dollar on the black market, according to a Tajik opposition-run news website Tajinfo.org. As of February 4, the official rate stands at TJS7.84 to the dollar, according to figures by the Tajik central bank.

Tajikistan is one of the world’s most remittance-dependent countries: remittances were equivalent to 46.6% of GDP in 2014. Remittances to the country declined by 33.3% y/y in 2015, the central bank said without specifying the absolute figure. One of the reasons for the decline in remittances is an economic slowdown in Russia and the resulting depreciation of the Russian ruble, which depresses the dollar value of the money migrants send home.

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