The effects of global financial meltdown on Tajikistan's economy

The effects of global financial meltdown on Tajikistan's economy - Central Asia News Afghanistan Kazakhstan Kyrgyzstan Uzbekistan Tajikistan Turkmenistan-Sports Business and Entertainment

Siyavush Mekhtan

2008-10-29

DUSHANBE, Oct. 24—The global financial crisis has not directly impacted Tajikistan's financial system because Tajik banks do not hold capital in the markets hit by the crisis, says Tajikistan National Bank's director of international finance, Zebo Fatkhuddinova.

''The most likely risk scenario for domestic banks and private citizens arises from exchange rates—fluctuations that can directly affect money held in foreign currencies,''Fatkhuddinova said. ''During the period from January to September 2008, the share of bank deposits in foreign currency was 64.8 percent, while local currency accounts were 35.2 percent of the total.''

Financial specialist Bakhrom Sharipov believes the main effect of the global financial crisis will be a tightening of bank lending on the domestic market. ''In other words, risk-prone manufacturing sectors will receive credit on stricter lending terms and in smaller amounts,''he said. ''To counteract a potential credit crunch, the country needs to adopt legislation for ensuring loan repayment.''

Tajikistan's economic minister, Gulomdzhon Bobozod, believes the global financial crisis may impact Tajikistan's foreign trade and the country's economic development. ''Foreign trade is equal to or even greater than GDP, and is projected to reach $4.7 billion [USD] this year,''he said. Tajikistan's gold reserves can cover two months of the country's imports. ''So it's clear that we need to find solutions to the following tasks: providing macroeconomic and social stability, improving job security and modernising the nation's economy.''

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