Tajikistan’s central bankers have issued another round of reassurances that they are not running out of cash, but they are again lobbying International Monetary Fund for a bailout just to be on the safe side.
Asia-Plus website on July 25 cited National Bank chairman Jamshed Nurmahmadzoda as saying that the amount of cash in circulation at the moment stands at around 6.6 billion somoni ($838 million), which he said was 36 percent more than at the same period in 2015.
Apparently pointing to the success of policies such as the widespread closure of small money exchange offices and the introduction of stiff criminal penalties for unauthorized money exchange operations, Nurmahmadzoda said it had now become the norm to conduct transactions in the local currency.
"Of course, this has created a great demand for the national currency and so we have accordingly increased its volumes in circulation to meet demand,” he said.
While it is hard to disprove any claims Nurmahmadzoda might care to make, it only takes a visit to one of Tajikistan’s several distressed banks to know that liquidity is far from healthy. At least three banks are teetering on the verge of bankruptcy. Some lenders have imposed withdrawal limits of 2,500 somoni ($315). And customers at the country’s largest bank, Tojiksodirotbank, are as much as it is possible choosing to move their accounts to other banks.
Nurmahmadzoda dismissed such worries, saying that Tojiksodirotbank is just suffering from management issues and that the country’s second biggest bank, Agroinvestbank, is doing perfectly fine. Even the normally circumspect IMF put lie to such brazen deception months ago.
Meanwhile, Reuters news agency cited National Bank deputy chairman Jamoliddin Nuraliyev, the son-in-law of President Emomali Rahmon, as saying that Tajikistan hopes to continue $500 million bailout talks with the IMF in August. The fund has noncommittally suggested it would help Tajikistan, but that will only come at the cost of root-and-branch reforms.
“It all depends on the negotiation process and the conditions (of the offer). If they suit us, they will be become a subject of negotiations,” Nuraliyev was reported as saying, achieving rare heights of gnomic delusion. “We need financial resources so … that we have credit resources and to avoid stagnation.”
And then the National Bank is also claiming to have boosted its cash and gold reserves by 45 percent since the first half of the year — up from an amount equivalent to 1.5 months of imports to 2.4 months of imports. Asia-Plus performed some basic math and came up with a figure of $600 million, as compared to the $481 million in reserves at the end of 2015.
Where is all this money coming from?
It certainly isn’t from migrant laborer remittances. Russia’s Central Bank confirmed everybody’s worst fears in March when it said that the amount of money transferred from Russia to Tajikistan last year had fallen almost 67 percent, from $3.8 billion in 2014 to $1.28 billion.
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