In a few months Tajikistan’s national currency loses 27 per cent vis-à-vis the US dollar. Wages lose purchasing power and imports are costlier for Tajik companies. Foreign trade balance gets worse as remittances from Tajiks working abroad fall.

Dushanbe (AsiaNews/Agencies) – The plunge of Tajikistan’s currency, the somoni, against the US dollar is rapidly eroding incomes and reducing the purchasing power of consumers and small businesses. In an increasingly impoverished country where hundreds of thousands of people are on the verge of hunger, experts wonder whether the devaluation is actually driven by big business profiting from the fall.

In May the somoni fell by 12 per cent against the American dollar. Since the beginning of the year, it has lost almost 27 per cent of its value against the US currency.

Sharif Rahimzoda, chairman of the National Bank of Tajikistan, said back in April that the bank had to allow a depreciation of the somoni to adjust to the falling currencies of Tajikistan's main trading partners, Russia and Kazakhstan. Both countries have experienced devaluation by 25 to 30 per cent since last autumn.

Employees are the most affected because their wages cannot cope with rising prices, especially of imports. 

As domestic consumption drops, small businesses are affected because they have to pay more for imports for dwindling sales. In some remote areas of the country some businesses have had to sell their goods at cost just to stay afloat.

By contrast, big export-oriented companies are profiting from the situation because they can sell their goods for hard currencies, whilst paying salaries and disbursing payroll and other taxes in somonis, which has the effect of reducing the value of employee salaries and taxes.

Given Tajikistan’s structural poverty, about 1.5 million Tajiks out of a total population of about seven million have emigrated, mostly to Russia and Kazakhstan with much of their earnings sent back home

However, according to the National Bank of Tajikistan, the volume of remittances received from migrant workers in Russia has dropped by 30 per cent during the first four months of this year, further depreciating the somoni, which was partly propped up by hard currency transfers made by migrants.

Moreover, a small number of entrepreneurs have been able to control market fluctuations in the Central Asian nation.

Rumours about a pending devaluation have already led to panic. People have lined up in front of banks and money exchanges to buy dollars.

Currency traders told Eurasianet that in such situations they get “unofficial orders” to stop operating on a variety of pretexts.

But many believe that such operations have not prevented big businesses from getting large quantities of hard currencies.

• tajikistan
• somoni
• currency
• exchange
• rate
• trade
• balance
• purchasing
• power
• wages
• emigrants
• remittances