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Turkmen Buy Foreign Currency On Black Market As Manat Falls Sharply

There is a shortage of foreign currency in Turkmenistan. (file photo)
There is a shortage of foreign currency in Turkmenistan. (file photo)

ASHGABAT -- The Turkmen national currency, the manat, has lost some 10 percent of its value on the black market as citizens scramble to buy what little foreign currency is available.

RFE/RL correspondents reported on January 29 that the currency was trading at about 32 manats to the dollar on the black market, compared with 27-28 manats a week earlier.

Sources close to financial institutions told RFE/RL on condition of anonymity that the situation was likely caused by a decrease in remittances sent by Turkmen migrant workers from Turkey to their families, exacerbating an already existing shortage of foreign currency.

The central bank established an official rate of 3.5 manats per dollar in 2015 and has not changed it since, while all currency exchange in cash has been banned since January 2016.

Officials at several local municipalities and the central bank did not respond to RFE/RL requests to comment on the situation.

The shortage began last March when the government tightened control over foreign currency after China, the main buyer of the country's natural gas, slashed imports and global energy prices plunged.

At the time, the central bank ordered banks to pay salaries of employees of foreign companies, organizations, and entities operating in the country, only in the Turkmen national currency.

Turkmenistan's tightly controlled economy has been struggling for some time, with government revenues depleted partly due to unsuccessful energy deals and low global prices for natural gas, the Central Asian country's main export.