Turkmenistan residents hope for return to free currency conversion

ASHGABAT (TCA) — Turkmenistan residents hope that after the closing of the Asian Games in Ashgabat, the authorities will reinstate free currency conversion in the country, the Chronicles of Turkmenistan foreign-based website reported on September 26 citing its sources in the country.

According to sources, the government is no longer able to retain the lower US dollar exchange rate established in Turkmenistan.

“Now it is problematic to deposit cash onto Visa cards to subsequently withdraw cash in dollars overseas. Banks make various excuses to refuse providing these services to clients,” an Ashgabat resident said.

Despite the fact that the income of Turkmen residents would halve, they expect that the free currency conversion will contribute to increased entrepreneurial activity, which will create new jobs. It might also result in price decreases for some imported goods.

A Turkmen entrepreneur told the Chronicles of Turkmenistan that in order to import goods into Turkmenistan, businesses have to buy foreign currency on the black market.

“A bribe needs to be paid in order to take dollars in cash out of the country. A bribe is also required to import merchandise at the customs. All of these lead to a two or three times increase in the price for imported merchandise in Turkmenistan,” the entrepreneur said.

At the same time the entrepreneur believes that the authorities have some fears regarding the exchange rate increase.

“The fact is that many residents now have their things packed and are waiting for the moment to exchange manats from selling their apartments, cars and businesses to dollars to depart the country. This might have a serious effect on the country’s economy. However, sooner or later the exchange rate will need to be depreciated as the banks will not be able to survive much longer. The longer they wait, the tougher the situation will be,” the entrepreneur believes.

It was previously reported that the authorities have been keeping the dollar exchange rate at the same level because all the contracts to build expensive sports facilities for the Asian Games had been concluded based on the exchange rate of 3.5 manats per US dollar.

Construction contracts had been awarded to companies close to the authorities. Consequently, if based on the economic efficiency the manat’s exchange rate is lowered, the construction companies and those who are behind them will incur considerable losses.

The problem with exchanging foreign currency is very acute in Turkmenistan. It is next to impossible to officially exchange manats to dollars. Residents are forced to buy foreign currency on the black market.


Times of Central Asia