DUSHANBE, February 7, Asia-Plus – On Monday February 6, the USD suddenly dropped in value in Tajikistan and the market USD/TJS (currency code of the somoni) exchange rate came down from 3.51 to 3.40 and many currency exchange points in Dushanbe did not sale USD, pleading lack of U.S. currency.
Only Tuesday afternoon, they began to sale the USD at the rate of 3.46.
According to the National Bank of Tajikistan, nothing supernatural is going on the country’s currency market. An official USD/TJS exchange rate has remained the same – 3.44.
A source at Tajik central bank said that the government cannot interfere to control the exchange rate of national currency. Several factors could contribute to reduction in value of the USD: rising demand for local currency and some market trends. According to the NBT, it cannot be ruled out that the USD dropped in value in the republic in connection with the fact that Tajik entrepreneurs had temporarily suspended business trips to China during the Chinese New Year’s celebrations.
Local independent experts hold the different opinion. Many of them have agreed that rapid increase in the exchange rate of the TJS resulted from president’s demand to take measures to curb galloping inflation in the country.
We will recall that President Rahmonov demanded at a January 31 government session that urgent measures should be taken to strengthen local currency.
Sometime currency trading prices fluctuate rapidly, and the central banks need to intervene to bring back the stability of the currency.
Independent expert Farrukh Zaripov noted that under normal market conditions, if the currency suddenly drops in value, the central bank can jump in with an intervention, in order to maintain the stability of the country’s economy. “Intervention is done by vast investment in the currency made by the central bank, that is to increase supply of foreign currency on the financial market of the country in order to meet high demand,” said Zaripov, “By the way, President Rahmonov also meant that, telling the government session.”
“However, instead of doing intervention, the country’s central bank has decided to introduce administrative measures to reduce the USD/TJS exchange rate,” the experts said, adding that there is a secret informal instruction to artificially reduce the USD exchange rate. “It is violation of a free currency circulation in the country,” Zaripov said.
According to experts, such measures will negatively impact the country’s economy. “Thus, it may lead to rapid outflow of capital from the country,” said Zaripov, “Realizing that their dollars are dropping in value here, foreign investors will just withdrew their capitals from Tajikistan, and a parallel currency market will appear as it is in Uzbekistan, where the USD rate is curbed artificially.”
