Turkmenistan Manat: Definition, Exchange Rates, and Economic Implications
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Summary:
The Turkmenistan manat (TMT) serves as the national currency of Turkmenistan, introduced in January 2009 at a ratio of 5,000-to-1 to its predecessor. While the official exchange rate stands at 3.5 TMT to the U.S. dollar, the black market offers significantly different rates, with one U.S. dollar buying 32 manat as of January 2021. This article delves into the history, denominations, and economic implications of the TMT.
Understanding the Turkmenistan manat (TMT)
Turkmenistan’s currency evolution
Turkmenistan’s monetary journey began in 1991 with the dissolution of the Soviet Union, prompting the nation to replace the Russian ruble with its own currency. In November 1993, Turkmenistan introduced its first national currency, marking a pivotal moment in its economic autonomy alongside other former Soviet states such as Armenia, Kazakhstan, Uzbekistan, and Azerbaijan.
Redenomination of the manat
In response to inflationary pressures, Turkmenistan undertook a currency redenomination on January 1, 2009, at a ratio of 5,000-to-1. The new manat was introduced, with an initial official exchange rate of 2.85 TMT to the U.S. dollar, aiming to stabilize its monetary system.
Denominations and features
TMT banknotes circulate in denominations of 1, 5, 10, 20, 50, and 100 manat, featuring portraits of historical figures significant to Turkmenistan’s heritage. Additionally, coins in values of 1 and 2 manat are supplemented by smaller denominations such as teňňe pieces, facilitating everyday transactions within the country.
Real-world example of the TMT
Economic profile of Turkmenistan
Spanning an area akin to California but with a sparser population, Turkmenistan’s economy relies heavily on its abundant natural resources, particularly natural gas and oil. With a reported GDP of $40.76 billion in 2018, driven by exports of natural gas, oil, and cotton, the nation’s economic landscape underscores its resource-driven focus.
Trade partners and exports
Turkmenistan’s trade relationships extend to key partners such as Russia, Italy, Iran, Turkey, and Ukraine, facilitating exchanges predominantly in natural gas, oil, and cotton exports. In 2019, exports were estimated at $10.3 billion, highlighting the significance of these trade corridors to Turkmenistan’s economic prosperity.
Exchange rate dynamics
Despite the establishment of an official exchange rate of 3.5 TMT to the U.S. dollar since 2015, disparities persist between official and black market rates, reflecting underlying economic challenges. Limited foreign exchange availability coupled with strict regulations contribute to a reliance on the black market, where rates can deviate significantly from official valuations, as evidenced by one U.S. dollar fetching 32 manat in the black market as of January 2021.
Frequently asked questions
What is the official exchange rate of the Turkmenistan manat (TMT)?
The official exchange rate is currently set at 3.5 TMT to the U.S. dollar.
How are TMT banknotes and coins distributed?
TMT banknotes are available in denominations of 1, 5, 10, 20, 50, and 100 manat, while coins are circulated in values of 1 and 2 manat, alongside smaller denominations such as teňňe pieces.
What are the primary exports of Turkmenistan?
Turkmenistan primarily exports natural gas, oil, and cotton, with its major trade partners including Russia, Italy, Iran, Turkey, and Ukraine.
What factors contribute to the discrepancy between official and black market exchange rates?
The disparity between official and black market exchange rates in Turkmenistan can be attributed to factors such as limited foreign exchange availability, strict regulations on currency exchange, and economic uncertainty, leading to a reliance on informal channels for currency transactions.
Key takeaways
- The Turkmenistan manat (TMT) serves as the national currency, introduced in January 2009 at a ratio of 5,000-to-1.
- Official exchange rate: 3.5 TMT to the U.S. dollar, though black market rates may significantly differ.
- Banknotes and coins: Available in various denominations, with portraits of historical figures.
- Turkmenistan’s economy relies on natural resources, primarily natural gas, oil, and cotton exports.
- Trade partners: Key partners include Russia, Italy, Iran, Turkey, and Ukraine.
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