Tajikistan reserves slump by half on back of Russian crisis

20th January 2015, Comments 0 comments

Ex-Soviet Tajikistan spent half of its reserves in a bid to prop up its currency in 2014 as fallout from Russia's economic crisis roiled the ex-Soviet region, the central bank said Tuesday.

National reserves in impoverished Tajikistan -- which relies heavily on remittances sent back from its citizens working in Russia -- fell from around 1.1 billion to some 480 million, the central bank said.

Despite the interventions, however, national currency, the somoni, lost some 11 percent against the dollar last year, helping to push inflation up to 7.4 percent.

"The fluctuations in the exchange rate on the Tajik market will continue until the price of oil and the Russian economy stabilise," said central bank chief Abdujabbor Shirinov.

Money sent back by Tajiks working in Russia -- where they usually fill menial jobs -- makes up about half of the nation's GDP.

Signs of growing economic difficulties are multiplying in former Soviet countries still tied closely to Russia as the falling price of oil and the impact of Western sanctions over the Ukraine crisis batter its economy.

The International Monetary Fund warned Tuesday in its global forecast that the slowdown in Russia and collapse of the ruble has "seriously weakened the outlook for other economies in the region."

In neighbouring Kyrgyzstan the national currency lost some 17 percent of its value in 2014, while Turkmenistan devalued its manat by 18 percent on January 1.

Rating agency Moody's on Friday cut the credit rating for Armenia, a former Soviet republic in the south Caucasus which also has a large diaspora working in Russia.

© 2015 AFP

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