Currency Slump Cuts Into Livelihoods

As Shahodat Saibnazarova reports, so much of what is sold in Tajikistan – consumer goods, clothing, fuel and even basic foodstuffs – is imported that the somoni’s falling exchange rate has brought sudden price rises across the board, hurting consumers.



Economists say the large share of imports in Tajikistan’s retail sector makes it highly sensitive to exchange-rate fluctuations.



One major reason for the somoni’s collapse – seen as the steepest in its history – is that the money sent home by Tajiks working abroad has fallen by about one-third in recent months. Whereas before this foreign currency was exchanged into somonis and flowed into the economy, now it is in shorter supply, and there is less demand for the somoni.



Tajikistan’s central bank, however, argues that the falling exchange rate is a natural adjustment to bring the country back into line with its main export markets, whose currencies have undergone similar depreciation – and sometimes deliberate devaluation – in recent months. When the somoni is weaker, the bank argues, it is good for exports.