News / Business

Turkmenistan limits access to US dollar

Wednesday, 20 July 2016 11:55 AM [ Last Update: Wednesday, 20 July 2016 11:55 AM ]

Turkmenistan, Central Asia's biggest gas exporter, has restricted access to foreign currency for local companies and individuals.

Turkmenistan has reportedly limited access to foreign currency for local companies and individuals in what appears to be a response to a sharp fall in the country’s export revenues.

Turkmen businessmen have told Reuters that foreign exchange operations are now handled by commercial banks which have a varying degree of access to foreign currency.

They have nevertheless emphasized that companies working on priority projects, such as the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, were still able to access foreign currency.

Another project moving at full steam is the construction of facilities for the 2017 Asian Indoor and Martial Arts Games, which is believed to be a matter of prestige for the Ashgabat government.

The move by Central Asia's biggest gas exporter has been described as unprecedented.

Reuters have further reported that the black market does not have enough foreign currency in circulation to meet demand, adding that this has caused problems not only for companies but also for the consumers.

Because of the shortage of foreign currency, prices for imported goods have soared.

The International Monetary Fund said last November that Turkmenistan had sufficient foreign reserves to cover about 30 months worth of imports, which by the IMF's standards is a comfortable level.

However, with no reported progress on resuming gas exports to Russia, Ashgabat may be trying to eke out its reserves for as long as possible by imposing restrictions now, Reuters added.

In Russia's absence, China has become the main buyer of Turkmen gas, purchasing about 30 billion cubic meters a year, or three-quarters of what Russia used to buy at the peak.

It is unknown how much China pays for that gas.

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