Worried about a collapse of the somoni, Tajik authorities have decided to close all currency exchange points in the country and prohibit the activities of all foreign currency dealers. Analysts warn the policy will be counterproductive.
The National Bank of Tajikistan said in a statement that private currency dealers are exchanging too many somoni banknotes into US dollars, and therefore the Tajik currency is fatally dropping its value.
“This is why this week an official order about permitting currency exchange operations at banks only will be published. This is being done to control the levels of our national currency from devaluation,” the statement said.
The Tajik somoni was at 5.3 somoni per 1 USD in January, and in the past week it dropped in value from 7 to 7.6 somoni per 1 USD.
Worried about further devaluation, Tajikistan’s authorities have shut down over 800 private currency exchange points and have announced that people will need to present their IDs to buy or sell currency. The number of foreign exchange points to be closed will reach 1,400 by next week.
Financial analyst Farmon Karamov says these measures will not help prevent currency devaluation, but are in fact preventing free cash flow.
“These measures are only establishing total control over cash flows, and this by no means is an indication of positive measures,” he says.
Labor rights activist Zarafo Dakhanova says that by closing more than 1,400 foreign exchange points the government is leaving more than 3,000 people without jobs.
“Each of such points employs at least two people. Some employ up to five people. Now these people will all lose their jobs. In a country like ours with such high levels of unemployment, how is this a smart move?” she asks.
Meanwhile, economist Farrukh Nazarov says that many of these foreign exchange points will now start operating illegally.
“By prohibiting their work, the government simply is pushing normal regular citizens into the world of crime. And they will not have any other choice in this case,” he warns.
Dushanbe resident Samaya says she is worried these measures will not help, but will instead make things even more difficult than they already are for Tajik citizens.
“Many of my coworkers and neighbors are now saying that we can only buy currency at the banks. This means the banks will be buying US dollars and euros, but they will now limit sales of US dollars and other foreign currency. This makes things difficult for citizens like me. For example, my daughter studies in Russia, I need to send her US dollars, how am I going to buy dollars now?” she asks.