DUSHANBE, February 5, 2009, Asia-Plus — There is a number of circumstances that have led to increase in the exchange rate of the dollar against the somoni, Chairman of the Association of Banks of Tajikistan (ABT), Mr. Izatullo Lalbekov, said in an interview with Asia-Plus.
“I could state briefly and said that the ongoing global financial crisis, plummeting prices for cotton and aluminum and decreasing remittances led to the present situation as it is now done,” said Lalbekov, “Of course, all these factors have negatively impacted currency receipts; however, surges are inevitable under existing floating exchange rate, being subject to supply and demand. It is logical.”
According to him, such surges of the exchange rates of foreign currencies against the somoni occurred in the previous years as well. “At that time, the somoni rate was maintained due to support of the National Bank of Tajikistan (NBT), while at present, the NBT has limited opportunities to maintain the stability of the national currency as the present country’s gold and currency reserves amount to only 198 million US dollars.”
The ABT head noted that the country had missed chance and opportunities to efficiently use remittances. “As usual, keeping to indirect participation of these funds on the consumer market, we have not taken into consideration the necessity of putting them into circulation through banks,” said Lalbekov, “Remittances were circulating out of banks and currency shortages and the national currency’s rate uncertainty could frequently be experienced on the domestic currency market, while “black market” was continuing to work in accordance with its rules.”
Lalbekov supposes that if they had used well-considered and weighted approach to buying out remittances in US dollars and Russian rubles and giving them to recipients in the somoni the NBT would have currently had the currency reserves of no less than 1 billion US dollars. “These reserves might be used to support the national currency’s rate” he said.
The expert ruled out the possibility of further rise in the exchange rate of the dollar against the somoni, which is currently 1:4.00 in Dushanbe’s currency exchange offices. “Further somoni fluctuation will depend on to what an extent the domestic financial market will be provided with foreign currency and free conversion from the somoni to the dollar at the rate of 4.00 somoni per 1.00 dollar becomes unlikely,” Lalbekov said.
Commenting on his conclusions, the ABT head said that Tajikistan’s consumer market and economy as whole remained import-oriented. “Under these conditions consumer goods are delivered to the country for foreign currency, mainly USD and Euro. After realization of them on the domestic market for the somoni suppliers should convert proceeds into foreign currency in order to resume purchase and delivery of goods.” One can imagine what happens if because of lack of foreign currency conversion is delayed, or what is worst, if it is stopped. This will lead to deficit, prices rises and will negatively impact value of the national currency.
According to him, it remains for Tajikistan to hope for support of the International Monetary Fund (IMF) for stabilizing the national currency’s rate.
