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The National Bank of Tajikistan has suspended the activities of private foreign exchange offices throughout the country in a move to limit the weakening of the somoni in the currency market.

“Such measure is taken in order to ensure stability in the foreign exchange market and support the national currency, protect the interests of customers of credit institutions," the central bank said in a statement.

Central authorities also decided to compel authorised banks to disclose the details of any transaction involving the sale of dollars, the statement added.

The somoni has depreciated by over 22% against the dollar since the end of September 2014, when it started weakening, dragged down by the negative effects spilling over from the crisis in Russia. Tajikistan is the world’s most dependent country on remittances, which made up 45.6% of GDP in 2014, according to official figures, and represent the country’s main source of foreign currency. Most of the remittances come from migrant Tajiks working in Russia. As the Russian economy abruptly slowed down in 2014, the flow of remittances they were able to send back home weakened.

The total amount of remittances Tajikistan received in 2014 decreased by 8.3% y/y to $3.9bn, according to figures from the National Bank of Tajikistan. They are now expected to fall by approximately 30% y/y in dollar terms in 2015, IMF local representative Aydyn Bibolov said in an interview with local news agency Asia-Plus (News.tj) on March 9.

The weakening somoni has pushed people to increasingly exchange somoni into dollars as the local currency falls in value. Bank deposits in dollars increased by 18% y/y at the end of February, when they made up 67% of all bank deposits. The high level of dollarisation of the economy puts additional pressure on the somoni as people keep dumping the local currency for dollars. The central bank now aims to limit such a dynamic by suspending the activity of private foreign currency offices across the country.

There are some 818 private foreign exchangers across the country, and another 581 offices are linked to authorized lending institutions and will not be closed, according to figures quoted by News.tj.

The same National Bank suspended its direct sales of dollar on March 13.