Identifier
Created
Classification
Origin
09ASHGABAT431
2009-04-07 04:54:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ashgabat
Cable title:
TURKMENISTAN: DOLLARS NOT WANTED
how-toVZCZCXRO1066 PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDBU RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHPW RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG DE RUEHAH #0431/01 0970454 ZNR UUUUU ZZH P 070454Z APR 09 FM AMEMBASSY ASHGABAT TO RUEHC/SECSTATE WASHDC PRIORITY 2602 INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY RUCNCIS/CIS COLLECTIVE PRIORITY RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY RUEHAK/AMEMBASSY ANKARA PRIORITY 5041 RUEHBJ/AMEMBASSY BEIJING PRIORITY 2794 RUEHKO/AMEMBASSY TOKYO PRIORITY 2659 RUEHIT/AMCONSUL ISTANBUL PRIORITY 3285 RUEKJCS/JOINT STAFF WASHDC PRIORITY RHMFIUU/CDR USCENTCOM MACDILL AFB FL PRIORITY RUEKJCS/SECDEF WASHDC PRIORITY RUEAIIA/CIA WASHDC PRIORITY RHEHNSC/NSC WASHDC PRIORITY RHEFDIA/DIA WASHDC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
UNCLAS SECTION 01 OF 02 ASHGABAT 000431
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: N/A
TAGS: ECON PGOV SOCI EFIN TX
SUBJECT: TURKMENISTAN: DOLLARS NOT WANTED
REFS: A) 08 ASHGABAT 17; B) 08 ASHGABAT 60; C) 08 ASHGABAT 485; C)
08 ASHGABAT 551
UNCLAS SECTION 01 OF 02 ASHGABAT 000431
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: N/A
TAGS: ECON PGOV SOCI EFIN TX
SUBJECT: TURKMENISTAN: DOLLARS NOT WANTED
REFS: A) 08 ASHGABAT 17; B) 08 ASHGABAT 60; C) 08 ASHGABAT 485; C)
08 ASHGABAT 551
1. (U) Sensitive but unclassified. Not for public Internet.
2. (SBU) SUMMARY: Problems exchanging US dollars for Turkmen manat
have been observed for the past week, due to the rumors that the
Government plans to depreciate the official exchange rate to an even
one manat for one dollar. (NOTE: The current rate is 2.84 DTM
(Denominated Turkmen Manat) per one US Dollar. END NOTE.) It is
unclear what is causing this problem, although there may be a
shortage of new banknotes. There is no proof of an impending
devaluation. Currency exchange points are overcrowded with long
lines of people waiting to convert their saved dollars into manats.
Some private vendors have stopped accepting dollars for payment.
END SUMMARY.
3. (SBU) Rumors spread at the end of March that the Government would
set a new exchange rate of one US dollar equal to one DTM effective
April 1st. The local population, who experienced the overnight
depreciation of the dollar last spring, tend to believe word of
mouth rather than the government's silence regarding its exchange
policy. As a result, those who prefer to keep their savings in
cash, "under their mattresses," rushed to the exchange points to
change dollars before their value "collapsed." People with
thousands of dollars in cash were observed at the exchange points
wishing to get rid of their dollars. According to post's local
staff who visited the exchange points, at some locations they were
not able to actually exchange dollars because of the long lines,
while at some smaller exchange points, like the one at Yimpash Trade
Center, belonging to the Turkmen Turkish JV Bank, there was an
exchange limit of 50 dollars per customer.
4. (SBU) An Embassy contact at the Forex Department of the Central
Bank of Turkmenistan said that no changes in the exchange rate are
anticipated. Nonetheless, bankers are apparently not sure
themselves of the government's exchange policy and also prefer to be
on the safe side by exchanging their dollar savings into manats.
The chairwoman of a provincial bank said that she opted to exchange
all her dollars that she had saved for her daughter's college
education into manats. "Of course, I will loose fifty or hundred
dollars when I buy the dollars back if the exchange rate remains the
same, but that is still better then losing thousands if the rate
falls" the Chairwoman said.
5. (SBU) Even the private traders and small businesses that need
dollars for trading goods from Turkey, China and UAE have not been
buying dollars, but as all others rushed to exchange their dollars
to manats. The "Bedew" shopkeepers (the line of shops supplying
construction materials, plumbing fixtures, and home appliances
located on the outskirts of Ashgabat),retailers at the "Tolkuchka"
bazaar as well as most of the private kiosks and mini-markets around
Ashgabat have been refusing to accept dollars for payment from
customers. Some Embassy local staff confirmed that they couldn't
pay dollars for the shopping they regularly do at any of these
places for the past week. The vendors were asking for payments in
manat cash only, although previously they used to accept dollars.
6. (SBU) The depreciation has also been observed at the so-called
"Daiza-Bank" (NOTE: "Daiza" means "aunt" in Turkmen; a common way to
address an older woman. Daiza-Bank, refers to the money changers
standing on the sidewalks, most of whom are women dressed in
traditional Turkmen national dress. END NOTE.) The Daiza-Bank's
rate dropped from 2.85 (which used to be higher then the official
rate of 2.84) to 2.60 DTMs per dollar during March 31 to April 2,
then increased back to 2.80. People who didn't want to stand in
long lines at the exchange points, had no other option but to sell
dollars at a lower rate at Daiza Bank.
7. (SBU) COMMENT: It's not clear what's causing the long lines at
the exchange points, and there is no concrete proof of an impending
devaluation. We've also heard that as the old manat banknotes are
ASHGABAT 00000431 002 OF 002
being withdrawn from circulation and destroyed, not enough new
banknotes have been put into circulation to make up the difference,
creating a manat shortage. In fact, one contact saw bags of new
banknotes being off-loaded on one international flight (They are
printed in the UK.) Still, many people remember what happened to
their savings last year when the opaque government policy on foreign
exchange and the forex rate unification resulted in overnight
depreciation of the dollar, with many ordinary people losing out as
a result (reftels). While ordinary citizens try to save their
under-the-mattress savings, the Daiza Bank appears to be gaining the
most from this forex game. END COMMENT.
MILES
SENSITIVE
SIPDIS
STATE FOR SCA/CEN, EEB
E.O. 12958: N/A
TAGS: ECON PGOV SOCI EFIN TX
SUBJECT: TURKMENISTAN: DOLLARS NOT WANTED
REFS: A) 08 ASHGABAT 17; B) 08 ASHGABAT 60; C) 08 ASHGABAT 485; C)
08 ASHGABAT 551
1. (U) Sensitive but unclassified. Not for public Internet.
2. (SBU) SUMMARY: Problems exchanging US dollars for Turkmen manat
have been observed for the past week, due to the rumors that the
Government plans to depreciate the official exchange rate to an even
one manat for one dollar. (NOTE: The current rate is 2.84 DTM
(Denominated Turkmen Manat) per one US Dollar. END NOTE.) It is
unclear what is causing this problem, although there may be a
shortage of new banknotes. There is no proof of an impending
devaluation. Currency exchange points are overcrowded with long
lines of people waiting to convert their saved dollars into manats.
Some private vendors have stopped accepting dollars for payment.
END SUMMARY.
3. (SBU) Rumors spread at the end of March that the Government would
set a new exchange rate of one US dollar equal to one DTM effective
April 1st. The local population, who experienced the overnight
depreciation of the dollar last spring, tend to believe word of
mouth rather than the government's silence regarding its exchange
policy. As a result, those who prefer to keep their savings in
cash, "under their mattresses," rushed to the exchange points to
change dollars before their value "collapsed." People with
thousands of dollars in cash were observed at the exchange points
wishing to get rid of their dollars. According to post's local
staff who visited the exchange points, at some locations they were
not able to actually exchange dollars because of the long lines,
while at some smaller exchange points, like the one at Yimpash Trade
Center, belonging to the Turkmen Turkish JV Bank, there was an
exchange limit of 50 dollars per customer.
4. (SBU) An Embassy contact at the Forex Department of the Central
Bank of Turkmenistan said that no changes in the exchange rate are
anticipated. Nonetheless, bankers are apparently not sure
themselves of the government's exchange policy and also prefer to be
on the safe side by exchanging their dollar savings into manats.
The chairwoman of a provincial bank said that she opted to exchange
all her dollars that she had saved for her daughter's college
education into manats. "Of course, I will loose fifty or hundred
dollars when I buy the dollars back if the exchange rate remains the
same, but that is still better then losing thousands if the rate
falls" the Chairwoman said.
5. (SBU) Even the private traders and small businesses that need
dollars for trading goods from Turkey, China and UAE have not been
buying dollars, but as all others rushed to exchange their dollars
to manats. The "Bedew" shopkeepers (the line of shops supplying
construction materials, plumbing fixtures, and home appliances
located on the outskirts of Ashgabat),retailers at the "Tolkuchka"
bazaar as well as most of the private kiosks and mini-markets around
Ashgabat have been refusing to accept dollars for payment from
customers. Some Embassy local staff confirmed that they couldn't
pay dollars for the shopping they regularly do at any of these
places for the past week. The vendors were asking for payments in
manat cash only, although previously they used to accept dollars.
6. (SBU) The depreciation has also been observed at the so-called
"Daiza-Bank" (NOTE: "Daiza" means "aunt" in Turkmen; a common way to
address an older woman. Daiza-Bank, refers to the money changers
standing on the sidewalks, most of whom are women dressed in
traditional Turkmen national dress. END NOTE.) The Daiza-Bank's
rate dropped from 2.85 (which used to be higher then the official
rate of 2.84) to 2.60 DTMs per dollar during March 31 to April 2,
then increased back to 2.80. People who didn't want to stand in
long lines at the exchange points, had no other option but to sell
dollars at a lower rate at Daiza Bank.
7. (SBU) COMMENT: It's not clear what's causing the long lines at
the exchange points, and there is no concrete proof of an impending
devaluation. We've also heard that as the old manat banknotes are
ASHGABAT 00000431 002 OF 002
being withdrawn from circulation and destroyed, not enough new
banknotes have been put into circulation to make up the difference,
creating a manat shortage. In fact, one contact saw bags of new
banknotes being off-loaded on one international flight (They are
printed in the UK.) Still, many people remember what happened to
their savings last year when the opaque government policy on foreign
exchange and the forex rate unification resulted in overnight
depreciation of the dollar, with many ordinary people losing out as
a result (reftels). While ordinary citizens try to save their
under-the-mattress savings, the Daiza Bank appears to be gaining the
most from this forex game. END COMMENT.
MILES