The Russian ruble (RR) is continuing to drop in Tajikistan. RR lost 2.4 percent of its value against the Tajik national currency, the somoni (TJS), over the first nine days of this month, falling from 1:0.1442 on January 1 to 1:0.1405 on January 9.
Volatility of the Russian national currency has been observed since early December last year, while sharp depreciation has become noticeable since December 20. During December, RR lost 11.3 percent of its value against TJS.
Local experts note that the Tajik national currency is pegged to the ruble due to Tajikistan’s strong socio-economic dependence on Russia. The dependency has increased even more last year in connection with transfer to the use of national currencies in the bilateral trade.
It is to be noted that Russia accounts for more than 30 percent of Tajikistan’s imports. Besides, remittances sent by Tajik labor migrants from Russia to banks in Tajikistan are equal to a third of the country’s gross domestic product (GDP).
Weakening of the Russian ruble has negative impact on incomes of families of Tajik labor migrants working in the Russian Federation. Since 2016, remittances sent to banks in Tajikistan in rubles have been issued to recipients in somonis.
Western experts noted that the Russian ruble was one of the world’s worst performing currencies last month as the oil-and-gas windfall that has helped insulate the country against Western sanctions this year fades.
In December, the ruble reportedly fell 14% this month against the U.S. dollar. The currency’s December decline was the largest among 49 currencies tracked by The Wall Street Journal.
According to The Wall Street Journal, Ms. Elina Ribakova, deputy chief economist at the Institute of International Finance, expects Russia’s current account-surplus to fall by at least half this year.
The flood of commodity revenues helped make the ruble one of the world’s best performers by this summer even as countries moved to cut Russia off from the global economy.
Liam Peach, senior emerging market economist at Capital Economics, reportedly said the ruble will remain under pressure this year as the impact of energy sanctions become clearer. He said the effects will be mixed. A weaker ruble could stoke inflation by increasing the cost of imports, but boost tax revenues as dollar-denominated energy earnings become more valuable in ruble terms.
Meanwhile, the official exchange rate of the dollar against the somoni has changed insignificantly over the first nine days of this month. The somoni lost 0.1 percent of its value against the dollar over the reporting period, falling from 10.2024:1 on January1 to 10.2154 on January 9.
Over the same nine-day period, the somoni has lost 1.6 percent of its value against the euro, falling from 10.2024:1 on January 1 to 10.2154:1 on January 9.
2022 has turned out to be quite an extraordinary year for the Tajik national currency. Last year, the somoni strengthened against the ruble, the dollar and the euro 3.4 percent, 9.4 percent and 14.8 percent, respectively.
