DUSHANBE, April 25, 2009, Asia-Plus — Devaluation of the somoni (TJS) against the dollar is an inevitable process under conditions of reduction in the money supply at a global scale, Tajik expert in banking system Jamshed Rahmonberdiyev said in an interview with Asia-Plus.
“It is already the second stage of devaluation of our currency against the world reserve currency,” said Rahmonberdiyev, “We passed the first stage at the beginning of the year, when the Tajik national currency fell some 10 percent against the dollar.”
We will recall that some media reported in February that the head of the National Bank of Tajikistan (NBT) Sharif Rahimzoda said the somoni’s weakening against the dollar was initiated by the country’s central bank. He said the plunge in the price of Tajikistan’s main commodities – aluminum and cotton – has caused the situation.
According to Rahmonberdiyev, the central bank that sets the somoni’s exchange rate is forced to systematically regulate the rate of the national currency against the rates of currencies of Tajikistan’s main trading partners (Russia and Kazakhstan) in order to keep Tajik commodities competitive both in domestic and international markets.
He says the national currency’s weakening will reduce expenses of domestic producers on manpower.
Besides, there is theory that gradual devaluation, which is currently going on in Tajikistan, will raise efficiency of economy and labor productivity because under conditions of profit shrinkage, inefficient businesses come to ruin and efficient businesses become stronger, Rahmonberdiyev said.
However, effects of devaluation will negatively impact Tajikistan’s economy because this process will lead to weakening of the country’s market. “Wages of population will drop and consumer demand will fall,” the expert said.
Rahmonberdiyev further added that it could not be ruled out that devaluation of the somoni would lead to increase of prices of some goods. “Reduction in the volume of imported goods may lead to increase in prices of some domestic goods,” he said.
In the meantime, the expert noted that first signals of improvement of situation have come from the United States in recent days and if the financial-economic situation becomes stable in the near future, the situation will come to normal in Tajikistan in one or two years as well.
