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Turkmenistan Bans Foreign Currency Cash Withdrawals In Sign Of Cash Crunch

Most holders of bank accounts in foreign currencies will only be able to withdraw money in manats. (file photos)
Most holders of bank accounts in foreign currencies will only be able to withdraw money in manats. (file photos)

ASHGABAT -- Turkmenistan has banned the withdrawal of cash in foreign currencies in banks as of April 1, a sign the Central Asian energy-rich nation may be cash-strapped.

Several bank officials, speaking on condition of anonymity, told RFE/RL that all banks in the country received a verbal order from the Central Bank of Turkmenistan that holders of bank accounts in foreign currencies can withdraw money only in Turkmen manats, and at the official exchange rate., an independent online news source, quoted employees of international energy companies operating in Turkmenistan -- Petronas, Dragon Oil, and Bouygues -- as saying that starting April 1, employees of foreign organizations and companies who receive their salary in foreign currencies such as U.S. dollars and euros will be able to withdraw money from their bank accounts in manats only.

Turkmenistan's Central Bank established an official rate of 3.5 manats per dollar in 2015, and has not changed it since. Meanwhile, the rate on the black market is more than five times higher. Since January 2016, all currency exchange in cash has been banned.

Last month, Turkmenistan tightened controls over foreign currency in the country after China, the main buyer of its natural gas, slashed imports and global energy prices plunged.

The central bank reduced the amount of foreign currency that citizens are allowed to purchase and have deposited onto their bank cards to $300 per month from $500, while the limit on outgoing wire transfers was cut to $200 per month from $300.

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

Government critics and human rights groups say Turkmen President Gurbanguly Berdymukhammedov has suppressed dissent and made few changes in the restrictive country since he came to power after the death of autocrat Saparmurat Niyazov in 2006.

Like Niyazov, Berdymukhammedov long relied on energy revenues to subsidize prices for basic goods and utilities to help maintain his grip on power.

With reporting by and Reuters

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