The increase in money supply in circulation is one of the factors accelerating inflation processes in Tajikistan, says The Macroeconomic Review prepared by the Chief Economist Group at the Eurasian Development Bank (EDB).
Money supply in circulation in Tajikistan has reportedly increased by 62%. This factor has also strengthened pressure on the exchange rate in the country. In early March, the exchange rate of the Tajik national currency, the somoni, against the dollar increased from 7.9:1 to 8.2:1.
To stabilize the currency market Tajik central bank has reportedly increased the refinancing rate from 12.5% to 16%. The required reserve rate has also been raised.
The high level of bad debts and increased rate will require the Central Bank to toughen prudential regulation of the banking sector, the report said.
The Eurasian Development Bank expects the year-end inflation in Tajikistan for this year to stand at 5.9%.
Meanwhile, the Tajik government expects the year-end inflation for this year to stand at 7%. (News.tj/Business World Magazine)