Tajikistan: National Currency Set to Implode?

The Tajik somoni has bottomed out against the dollar after a month of "intensive" devaluation, the National Bank chairman Sharif Rahimzoda is saying.

Rahimzoda insists the national currency will hold against the dollar at an exchange rate of no less than 4.6 somoni per greenback. He declined to speculate on a further devaluation, fearing mass panic and a run on banks.

"[To speculate] can provoke panic among the population and the massive withdrawal of money from bank accounts," CA-News.org quotes him as saying at a press conference in Dushanbe on May 26.

The somoni lost 3 percent of its value against the dollar in past seven days, 9 percent in the last month, and has sunk by more than 20 percent since the start of 2009. Dushanbe residents tell EurasiaNet they are monitoring the exchange rate by the hour.

In January, Rahimzoda warned of an impending currency crisis saying that Tajikistan "has limited opportunities to maintain the stability of the national currency rate" as the country's gold and foreign currency reserves were slashed by nearly 50 percent in 2008 from $235 million to $198 million.