Identifier
Created
Classification
Origin
08ASHGABAT17
2008-01-04 12:12:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ashgabat
Cable title:
TURKMENISTAN: EXCHANGE BOOTHS OPEN IN BANKS;
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UNCLAS SECTION 01 OF 02 ASHGABAT 000017
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
AID/W FOR AA/EE
E.O. 12958: N/A
TAGS: PGOV ECON EFIN TX
SUBJECT: TURKMENISTAN: EXCHANGE BOOTHS OPEN IN BANKS;
UNOFFICIAL EXCHANGE POINTS CLOSED
REF: 07 ASHGABAT 1403
UNCLAS SECTION 01 OF 02 ASHGABAT 000017
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
AID/W FOR AA/EE
E.O. 12958: N/A
TAGS: PGOV ECON EFIN TX
SUBJECT: TURKMENISTAN: EXCHANGE BOOTHS OPEN IN BANKS;
UNOFFICIAL EXCHANGE POINTS CLOSED
REF: 07 ASHGABAT 1403
1. (U) Sensitive but unclassified. Not for public Internet.
2. (SBU) SUMMARY: True to the president's word, all
unofficial currency exchange outlets shut down on January 2.
While the Central Bank Chairman promised a sufficient supply
of dollars to the public, according to anecdotal evidence,
this is already not the case. The government also stated
that new measures aimed at slowly unifying the rate would
keep living costs affordable, but this also does not appear
to be true. This cable incldes first impressions of the
impact of the official bank exchange booths, and we will
continue to monitor the situation. END SUMMARY.
"UNOFFICIAL" RATE NOW CALLED "COMMERCIAL" RATE
3. (U) President Berdimuhamedov announced on December 27 in
the decree "On Issues of Improving Turkmenistan's Foreign
Currency Operations" that the government of Turkmenistan
would open 105 exchange offices in banks throughout the
country on January 2 (reftel). Reasons given for this decree
include "orderly circulation of foreign currency in
(Turkmenistan's) economy, strengthening control over it,
creating favorable conditions for transition towards a
unified exchange rate...as well as increasing international
economic activity and attracting foreign financial
investments." The Central Bank also said that this decree
would ensure moderate housing, food, and imported medicine
prices for the public.
UNOFFICIAL CURRENCY EXCHANGE BOOTHS CLOSED
4. (SBU) On January 2, the unofficial currency exchange
houses operating near Embassy Ashgabat were closed. Police
are noticeably present at bazaars and at the department store
near the Embassy, places that commonly offered currency
exchange at the unofficial rate. An Embassy employee noticed
that individuals still quietly engaged in currency exchange
at one of the local bazaars, however, and did not witness any
arrests.
NOW THE EMBASSY CAN EXCHANGE MONEY, TOO
5. (SBU) Vnesheconombank informed Embassy Ashgabat that it
can convert funds for the U.S. government at the new
"commercial" -- in the old vernacular, "unofficial" -- rate
of 19,800 manat per dollar. For the first time, the Embassy
will offer currency exchange services, and at the same rate
that is available at the official exchange outlets.
"OFFICIAL" RATE STILL "OFFICIAL," BUT PURPOSE UNCLEAR
6. (U) The "official" rate is now fixed at 6,250 for $1.
However, we are still unable to identify who or which
entities are obliged to use this rate, and in which
circumstances. Before January 1, this rate was 5,200 manat
for $1.
PRACTICAL EXPERIENCES DIFFER FROM PRESIDENT'S PROMISES
7. (SBU) During an explanation of changes in currency
exchange procedures on television on December 28, Central
Bank Chairman Geldimyrat Abylov stated that enough currency
to satisfy everyone's needs would be available. However, one
Embassy employee heard that a cashier at a bank exchange
booth told someone that he could only exchange $20, and then
told the next person that he could exchange $50. This could
be evidence that bribing at currency exchange booths may
already be underway. Embassy personnel easily exchanged
dollars for manat, but did not receive a receipt for the
ASHGABAT 00000017 002 OF 002
exchange.
8. (SBU) COMMENT: While we do not yet know if the closure
of the unofficial booths is permanent, some locals feel that
the unofficial exchange houses will remain closed if the new
exchange offices operate well and satisfy everyone's needs.
The system shows significant weaknesses already, so it is
probably only a matter of time before a real black market
emerges. Meanwhile, the changing exchange rates affect
prices. On January 4, the Embassy Travel learned that
Turkmenistan Airlines ticket prices are going up by 20
percent because of the change of the official exchange rate.
Contrary to the Central Bank's intentions, prices for other
goods and services continue to rise as well, and locals do
not expect a reversal of that trend. END COMMENT.
HOAGLAND
SIPDIS
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
AID/W FOR AA/EE
E.O. 12958: N/A
TAGS: PGOV ECON EFIN TX
SUBJECT: TURKMENISTAN: EXCHANGE BOOTHS OPEN IN BANKS;
UNOFFICIAL EXCHANGE POINTS CLOSED
REF: 07 ASHGABAT 1403
1. (U) Sensitive but unclassified. Not for public Internet.
2. (SBU) SUMMARY: True to the president's word, all
unofficial currency exchange outlets shut down on January 2.
While the Central Bank Chairman promised a sufficient supply
of dollars to the public, according to anecdotal evidence,
this is already not the case. The government also stated
that new measures aimed at slowly unifying the rate would
keep living costs affordable, but this also does not appear
to be true. This cable incldes first impressions of the
impact of the official bank exchange booths, and we will
continue to monitor the situation. END SUMMARY.
"UNOFFICIAL" RATE NOW CALLED "COMMERCIAL" RATE
3. (U) President Berdimuhamedov announced on December 27 in
the decree "On Issues of Improving Turkmenistan's Foreign
Currency Operations" that the government of Turkmenistan
would open 105 exchange offices in banks throughout the
country on January 2 (reftel). Reasons given for this decree
include "orderly circulation of foreign currency in
(Turkmenistan's) economy, strengthening control over it,
creating favorable conditions for transition towards a
unified exchange rate...as well as increasing international
economic activity and attracting foreign financial
investments." The Central Bank also said that this decree
would ensure moderate housing, food, and imported medicine
prices for the public.
UNOFFICIAL CURRENCY EXCHANGE BOOTHS CLOSED
4. (SBU) On January 2, the unofficial currency exchange
houses operating near Embassy Ashgabat were closed. Police
are noticeably present at bazaars and at the department store
near the Embassy, places that commonly offered currency
exchange at the unofficial rate. An Embassy employee noticed
that individuals still quietly engaged in currency exchange
at one of the local bazaars, however, and did not witness any
arrests.
NOW THE EMBASSY CAN EXCHANGE MONEY, TOO
5. (SBU) Vnesheconombank informed Embassy Ashgabat that it
can convert funds for the U.S. government at the new
"commercial" -- in the old vernacular, "unofficial" -- rate
of 19,800 manat per dollar. For the first time, the Embassy
will offer currency exchange services, and at the same rate
that is available at the official exchange outlets.
"OFFICIAL" RATE STILL "OFFICIAL," BUT PURPOSE UNCLEAR
6. (U) The "official" rate is now fixed at 6,250 for $1.
However, we are still unable to identify who or which
entities are obliged to use this rate, and in which
circumstances. Before January 1, this rate was 5,200 manat
for $1.
PRACTICAL EXPERIENCES DIFFER FROM PRESIDENT'S PROMISES
7. (SBU) During an explanation of changes in currency
exchange procedures on television on December 28, Central
Bank Chairman Geldimyrat Abylov stated that enough currency
to satisfy everyone's needs would be available. However, one
Embassy employee heard that a cashier at a bank exchange
booth told someone that he could only exchange $20, and then
told the next person that he could exchange $50. This could
be evidence that bribing at currency exchange booths may
already be underway. Embassy personnel easily exchanged
dollars for manat, but did not receive a receipt for the
ASHGABAT 00000017 002 OF 002
exchange.
8. (SBU) COMMENT: While we do not yet know if the closure
of the unofficial booths is permanent, some locals feel that
the unofficial exchange houses will remain closed if the new
exchange offices operate well and satisfy everyone's needs.
The system shows significant weaknesses already, so it is
probably only a matter of time before a real black market
emerges. Meanwhile, the changing exchange rates affect
prices. On January 4, the Embassy Travel learned that
Turkmenistan Airlines ticket prices are going up by 20
percent because of the change of the official exchange rate.
Contrary to the Central Bank's intentions, prices for other
goods and services continue to rise as well, and locals do
not expect a reversal of that trend. END COMMENT.
HOAGLAND