Identifier
Created
Classification
Origin
08ASHGABAT574
2008-05-06 11:15:00
CONFIDENTIAL//NOFORN
Embassy Ashgabat
Cable title:
TURKMENISTAN DEVALUES THE EURO
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C O N F I D E N T I A L ASHGABAT 000574
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
TREASURY FOR LANIER/BAKER
E.O. 12958: DECL: 05/06/2018
TAGS: PGOV PREL ECON EFIN SOCI TX
SUBJECT: TURKMENISTAN DEVALUES THE EURO
REF: ASHGABAT 0551
Classified By: CHARGE SYLVIA REED CURRAN FOR REASONS 1.4 (B) AND (D).
C O N F I D E N T I A L ASHGABAT 000574
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
TREASURY FOR LANIER/BAKER
E.O. 12958: DECL: 05/06/2018
TAGS: PGOV PREL ECON EFIN SOCI TX
SUBJECT: TURKMENISTAN DEVALUES THE EURO
REF: ASHGABAT 0551
Classified By: CHARGE SYLVIA REED CURRAN FOR REASONS 1.4 (B) AND (D).
1. (C) Europa House Coordinator Emilio Valli told EmbOffs
May 4 that Turkmenistan has recently devalued the euro 30% in
relation to the Turkmenistan manat. He explained this was
done in order to prevent people from further profiting on a
difference between the European and Turkmenistan euro/dollar
rates that existed as Turkmenistan was devaluing the dollar
step-by-step prior to the local currency rate unification on
May 1 (reftel). (NOTE: Unlike with the dollar, there has
never been a dual official and "unofficial" exchange rate for
the euro in Turkmenistan. END NOTE.) Valli revealed that
just as people are limited in the amount of dollars they can
exchange at any one time (currently $100),the Turkmenistan
government has limited the amount of euros he can transfer
into his local National Bank of Pakistan account. When he
first arrived earlier this year, he was told he could only
transfer 50,000 euros/month for the first three months and
would have to wait an additional four months before putting
more into the account. Thereafter, he would be limited to
depositing, at most, 5,000 euros/month. Due to the deposit
restrictions imposed, he decided to bring the start up money
for Europa House with him in cash.
2. (C) COMMENT: Most expert observers agree the manat is
overvalued against the dollar and euro alike. While the more
sophisticated of Ashgabat's residents are beginning to favor
euros, the familiar dollar remains the foreign currency of
choice. The price street traders are giving for dollars is
15,000 manat/dollar (official rate is 14,250/dollar). Rumors
are rife that the government will sooner or later devalue the
manat and bring it closer to its real value. No one seems to
know exactly what that real value may be, with some people
feeling it could return to its 2007 "unofficial rate" value
of 24,000 or even go higher. In the meantime, local
residents are showing they have more confidence in the dollar
than the manat. At 7:00am on May 6, EmbOff, while out
jogging, found a line around the block of local residents
waiting to enter a bank to exchange their manat for dollars.
END COMMENT.
CURRAN
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
TREASURY FOR LANIER/BAKER
E.O. 12958: DECL: 05/06/2018
TAGS: PGOV PREL ECON EFIN SOCI TX
SUBJECT: TURKMENISTAN DEVALUES THE EURO
REF: ASHGABAT 0551
Classified By: CHARGE SYLVIA REED CURRAN FOR REASONS 1.4 (B) AND (D).
1. (C) Europa House Coordinator Emilio Valli told EmbOffs
May 4 that Turkmenistan has recently devalued the euro 30% in
relation to the Turkmenistan manat. He explained this was
done in order to prevent people from further profiting on a
difference between the European and Turkmenistan euro/dollar
rates that existed as Turkmenistan was devaluing the dollar
step-by-step prior to the local currency rate unification on
May 1 (reftel). (NOTE: Unlike with the dollar, there has
never been a dual official and "unofficial" exchange rate for
the euro in Turkmenistan. END NOTE.) Valli revealed that
just as people are limited in the amount of dollars they can
exchange at any one time (currently $100),the Turkmenistan
government has limited the amount of euros he can transfer
into his local National Bank of Pakistan account. When he
first arrived earlier this year, he was told he could only
transfer 50,000 euros/month for the first three months and
would have to wait an additional four months before putting
more into the account. Thereafter, he would be limited to
depositing, at most, 5,000 euros/month. Due to the deposit
restrictions imposed, he decided to bring the start up money
for Europa House with him in cash.
2. (C) COMMENT: Most expert observers agree the manat is
overvalued against the dollar and euro alike. While the more
sophisticated of Ashgabat's residents are beginning to favor
euros, the familiar dollar remains the foreign currency of
choice. The price street traders are giving for dollars is
15,000 manat/dollar (official rate is 14,250/dollar). Rumors
are rife that the government will sooner or later devalue the
manat and bring it closer to its real value. No one seems to
know exactly what that real value may be, with some people
feeling it could return to its 2007 "unofficial rate" value
of 24,000 or even go higher. In the meantime, local
residents are showing they have more confidence in the dollar
than the manat. At 7:00am on May 6, EmbOff, while out
jogging, found a line around the block of local residents
waiting to enter a bank to exchange their manat for dollars.
END COMMENT.
CURRAN