ASHGABAT (TCA) — From July 25, the Central Bank of Turkmenistan has fully stopped currency conversion for companies and organizations of all forms of ownership, Alternative News of Turkmenistan reported with reference to its sources in the Turkmen government.
Now only the President of Turkmenistan can by his special decree allow the Bank to convert Turkmen manats into hard currency for this or that Turkmen enterprise, and only as part of a state project.
That means that now private entrepreneurs that import finished goods or components, including components of food and industrial products, will not be able to pay their foreign suppliers. Such restrictions were first introduced last October, but they did not touch food and industrial products.
Local entrepreneurs hope the measure is temporary; otherwise the country would “slide back into a shuttle-trade era, when food was imported from Moscow in travel bags”.
In the meantime, The Chronicles of Turkmenistan independent website reported that on June 26, Turkmen authorities imposed new restrictions on money transfers via Western Union. In order to send or receive a money transfer, an income statement along with a confirmation of family relations between a sender and a recipient need to be presented.
However, many Turkmen citizens work outside Turkmenistan illegally, and consequently are unable to provide an income statement.
The website believes the requirement was introduced to better monitor and control the income of Turkmen residents working abroad. Under conditions of a growing financial slump the authorities of Turkmenistan are trying to control the personal income of the country’s residents.
According to the International Monetary Fund (IMF), Turkmenistan has been seriously affected by external shocks, including permanently lower energy prices. The combined effect of lower prices for oil and natural gas, the recession in Russia, the cooling of the Chinese economy, and a sizeable appreciation of the U.S. dollar has caused GDP growth in Turkmenistan to decline to 6.5 percent in 2015, which is still a higher rate than in most other countries in the region but a significant drop from 10.3 percent in 2014.
“The Turkmen authorities responded to the worsened external environment pro-actively. They devalued the manat in January 2015, cut investment spending and subsidies, increased tax revenue from the non-hydrocarbon economy, and strengthened banking sector regulation and supervision,” the IMF said earlier this year.
