Restrictions on the circulation of cash out of Turkmenistan have reportedly been extended to a service popularly used to make transfers to relatives abroad.
The foreign-based Alternative News of Turkmenistan reported earlier this month that Western Union branches in the country had limited transfers out of the country to just $300 per transaction. The payment could be made only in manat at the state-approved exchange rate, which is lower than the black market rate. Operations carried out with a credit card incurred an additional surcharge equivalent to 8 percent of the sum being sent.
The monthly limit on how much can be transferred was set at $1,000 per person.
Operations also required presenting various documentation, including the Soviet-vintage propiska and employment record book, which evidently reflects the authorities desire to monitor who is sending what, where and when.
Although strict, the apparently informal rules appear to have not done enough to stem the outflow of dollars.
Alternative News of Turkmenistan cited sources inside the country as saying Western Union has now introduced a new cap. Customers can no longer transfer amounts larger than their monthly salary.
If correct, the fact that people are believed to have been funneling more money out than they officially earn — presumably offloading their cash savings in the process — is a stark testament to mounting loss of trust in the domestic currency.
Under the new rules, Western Union branches require people sending money to relatives to produce an official note from an employer about the size of their monthly salary. The note has to be compiled on a company letterhead and notarized with a company stamp and signed by a superior. The requirements in effect disqualify those either not in paid work or paid in cash, such as those operating in the informal economy.
Since the vast majority of people in Turkmenistan make well under $1,000, the limitation will begin hurting soon. Particular concern is aroused by the situation of Turkmen students abroad who are reliant on the financial support of their families.
This is only the latest desperate measure of a government seeking to deter its population from jettisoning the manat.
Starting last August, citizens were limited to buying $1,000 each month per person. Tellers at cash exchange points plugged passport details into a computer database to ensure against repeat attempts to change money elsewhere.
The $1,000 exchange limit remained in place until November, when it was transformed to an almost identical (in value) combination of $450 and 500 euros per month.
Things were further complicated in December, when a ticketing system was introduced, whereby people hoping to exchange cash had to obtain paper slips appointing a time and date when they would be allowed to undertake the operation at the bank.
For all these clear signs of crisis, the government has so far stiffly resisted allowing the official exchange rate to budge by even an inch since the one-off devaluation at the start of January 2005, when the manat fell overnight from 2.85 to 3.50 against the dollar.
Turkmens are growingly increasingly certain a new devaluation will happen, but they don’t know whether it will happen soon or whether they will manage to offload most of their manat before it happens.