Depreciation of the Russian ruble has complicated the already difficult life of millions of residents of Tajikistan – families of labor migrants working in the Russian Federation.
Remittances having been received by households in recent month have depreciated to the level of seven years ago.
The exchange rate of the Russian ruble against the Tajik national currency, the somoni, set by the Tajik commercial banks, has fallen from 1:0.137 last month to 1:0.121. The current official exchange rate of the Russian ruble against the somoni, set by local commercial banks, is on average 1:0.121.
As of January 1, 2023, the exchange rate of the Russian ruble against the somoni, set by local commercial banks, was on average 1:0.152
Meanwhile, today’s official exchange rate of the Russian ruble against the somoni, set by the National Bank of Tajikistan (NBT), is 1:0.119.
As of January 1, 2023, official exchange rate of the Russian ruble against the somoni was 1:0.1442.
According to data from the World Bank, labor migration increased significantly last year with reports of one-third to one-half of households having at least one member working as a migrant abroad, primarily in the Russian Federation.
World Bank’s “Tajikistan Economic Update – Summer 2023” notes that Tajikistan’s economy last year benefited from Russia’s strong labor demand and appreciation of the Russian ruble – the main earning and transfer currency of labor migrants. Remittances from Russia reportedly account for over 85 percent of total remittances to Tajikistan. The outbreak of the war and the departure of many western companies and their staff increased Russia’s employment opportunities for migrants from Central Asia and South Caucuses. The ruble's appreciation over local currencies further drove the attractiveness of employability in Russia. As a result, migration from Central Asia increased significantly in 2022 before showing some decline after Russia announced mobilization in September.
Therefore, depreciation of the Russian ruble has complicated the already difficult life of labor migrants’ families at home, which are heavily dependent on remittances.
Meanwhile, some Tajik labor migrants working in Russia, who have made savings in rubles, in particular, for the purchase of housing, still decided not to use this money due to the collapse of the ruble.
Although, on the other hands, there is a possibility of further devaluation of the Russian ruble in the coming days, weeks, or even months and years.
Another category of residents of Tajikistan, on contrary, is happy about the depreciation of the ruble against the local currency.
It is, first of all, parents, who provide financial support to their children studying in Russian higher educational institutions.
Besides, Tajikistanis, who had worked in Russia and received loans from Russian banks in the Russian rubles. Now they are employed in Tajikistan and are returning the money received at the expense of salaries in the somonis.
Meanwhile, the Russian Central Bank attributes the collapse of the Russian ruble to, first of all, the change in the country's trade balance.
“The Central Bank says it sees no financial stability risks due to depreciation of the exchange rate of the Russian ruble,” Ms. Kseniya Yudayeva, the first deputy head of the Russian Central Bank, told RBK last week, adding that that financial regulator does not see the need to return the mandatory sale of foreign exchange earnings against this background.
The exchange rate of the Russian ruble against the US dollar dropped from 90.34:1 on July 6 to 92.57:1 on July 7.
As of January 1, 2023, the exchange rate of the Russian ruble against the US dollar was 70.34:1. Thus the Russian ruble has lost 31.6 percent of its value against the US dollars since the beginning of the year.
