Energy-rich Turkmenistan devalues currency against dollar

ASHGABAT: The energy-rich former Soviet republic of Turkmenistan Thursday devalued its currency against the US dollar by 18 percent, in the latest sign of contagion among Russia's neighbours from the plunging ruble.

On Thursday, the website of Turkmenistan's central bank published the rate of 3.50 manats to the US dollar, from 2.85 manats, a depreciation of 18.6 percent. The devaluation came as the plunge in value of the Russian ruble, linked to Western sanctions over Ukraine and falling oil prices, sent shockwaves through former Soviet republics.

All Turkmenistan's currency exchange offices and banks were closed Thursday, officially due to the public holiday. The official exchange rate set by the central bank for the manat had been set at 2.85 to the US dollar since 2009. Earlier in 2009, Turkmenistan had knocked zeroes off the manat in a redenomination after the official exchange rate reached 14,250 to the dollar. Turkmenistan has been led by President Gurbanguly Berdymukhamedov since 2006, following the death of the eccentric dictator Saparmurat Niyazov, who erected a golden statue of himself that revolved to face the sun.

Earlier Thursday, Turkmenistan's oil and gas ministry announced petrol prices had risen by 60 percent. The rising price did not immediately lead to long queues at petrol pumps. A litre of one type of petrol on Thursday cost one manat, while previously it cost 62 tenge (22 US cents under the previous exchange rate). No immediate explanation was given for the sudden price rise. From 2007 until July last year, car drivers in Turkmenistan were issued with 120 litres per month of free petrol. Turkmenistan claims to hold the world's fourth-biggest reserves of natural gas and also has vast oil deposits. Turkmenistan's former Soviet neighbours in Central Asia have already suffered serious economic fallout from the plunge in value of the Russian ruble, which fell 41 percent against the dollar in 2014.

Kyrgyzstan saw its local currency, the som, fall more than 17 percent in value against the dollar in 2014, while Tajikistan's currency, the somon, lost nearly 14 percent against the dollar. Kazakhstan's central bank back in February devalued its currency, the tenge, by about 19 percent.

The crisis forced the central bank of another of Russia's ex-Soviet neighbours, Belarus, to introduce emergency measures and its authoritarian President Alexander Lukashenko sacked the prime minister on Saturday.