The National Bank of Tajikistan -
Independent Bank of Sovereign State

The independence of the National Bank of Tajikistan was given legal status through the New Law of the Republic of Tajikistan 'of the National Bank of Tajikistan' approved by the 5th December Session of Majlisi Oil (Parliament) 1996. In accordance with the Law, the National Bank of Tajikistan is solely accountable to Majlisi Oil and is not responsible for State commitments. It must be taken into account that the new Law has been drafted according to international standards and requirements, with participation and co-operation of IMF experts.

The National Bank of Tajikistan has correspondent relations with many influential foreign banks among such as Credit Swiss Bank Corporation (Switzerland), City Bank (USA), Deutsche Bank (Germany), Midland Bank (Great Britain) and others.

The National Bank of Tajikistan collaborates with the largest international institutions such as: the International Monetary Fund (the Republic of Tajikistan joined the IMF in 1993), the International Bank for Reconstruction and Development (since 1993); the European Bank for Reconstruction and Development (since 1991); the Islamic Development Bank (since 1993). The National Bank of Tajikistan is one of the main bodies taking a very active role in the Republic of Tajikistan's entrance into the World Economic System as a sovereign and economically independent state.

The National Bank of Tajikistan plays an important role which is speeding up the country's transition to a market-based economy. The most important step in this direction was the introduction of a national currency (rubl) on 10 May 1995. Before this the Russian rouble was used as legal tender in the Republic. The procedure for the introduction of the national currency was prepared and effected in close collaboration and with direct assistance from the IMF.

From the 4th quarter of 1995 and during 1996 the National Bank of Tajikistan implemented a tight monetary policy, the main target of which was a slowdown in inflation and stabilisation of the Tajik rubl.

This policy was closely co-ordinated with the Government's Macroeconomic Programme and the financial stabilisation of the economy of the Republic was agreed with the IMF.

The above Programme was primarily aimed at halting the reduction in industrial production, at the denationalisation of small and middle-size enterprises, the development of a financial market and improvement in the way it functions, strengthening the spending power of the national currency and growth in foreign economic activities.

To achieve the tasks set the National Bank of Tajikistan, the Bank stopped granting direct credit to the economy. In order to control the increase in money supply, limits were set on the marginal net domestic and foreign assets of monetary authorities, as well as marginal net claims of monetary authorities on the Government. Moreover, targets for net international reserves were also set. The National Bank of Tajikistan performs daily, ten-day and monthly monitoring of Monetary Programme parameters.

The tight monetary policy of the National Bank of Tajikistan has given its results. During 1996 the Tajik rubl rate fluctuated between 280 and 310 rubls to one USD.

The inflation growth rate in 1996 was significantly lower than in 1995.

For seven months of l995 (after the introduction of a national currency) inflation was +984%, but down to +40.5% in 1996. The average monthly indications for 1995-1996 decreased from 166% to 3.4%. All these were achieved by the implementation measures of the National Bank of Tajikistan, such as holding cash and non-cash foreign exchange auctions at the Interbank Currency Exchange, control over the increase of money supply and regulation of credit investments into the economy.

The National Bank of Tajikistan has the exclusive right of licensing, supervision and regulation of banks and other credit institution activities. By early 1997 the numbers of commercial banks in the republic had increased from five to 21 in comparison with 1991. The largest joint-stock commercial banks in the republic, to which 80 per cent of all banking operations belong, are: a) Joint-Stock Commercial AgroIndustrial bank 'Shark'; b) State Joint-Stock Commercial Bank for Foreign Economic Affairs 'Tajikvnesheconombank'; c) Tajik Joint-Stock Industrial Bank 'Orientbank' d) State Joint-Stock Commercial Bank for Social Development and Entrepreneurship 'Tajikbankbusiness'.

The bank pursues its own policy of furthering the development and operation of commercial banks. After the introduction of the national currency, the volume of the authorised capital of commercial banks was 10 million Tajik rubls.

In 1996, in order to strengthen the competitiveness of commercial banks to raise their prestige, the authorised capital was increased to 90 million Tajik rubls, which is equivalent to US$300 million. The majority of large banks have their own branches in every district of the republic, as well as correspondent relations with foreign banks, which promote timely foreign exchange payments and other transactions. The Joint Tajik-Cyprus Bank 'Central Asian Bank' and a branch of 'Tejarat' Bank of the Islamic Republic of Iran also operate in Tajikistan.

The national bank is working towards the formation of a new type of staff, with a flexible, adaptable attitude to market conditions. The officers of various subdivisions of the bank have attended training courses in CIS countries and abroad, held by IMF, IBRD, EBRD and other international institutions. Officers in the republic's banking system systematically improve their qualifications at the Regional Banking Training Centre in Tashkent (Uzbekistan), established with the participation of Turkey.

Tukhtaboy Gafurov was appointed as the first Chairman of the National Bank of Tajikistan from 28 June 1991 to 13 March 1992 (he is at present the Minister of Foreign Economic Relations).

From 22 May 1992 to 8 December 1994 his successor was Kayum Kavmidinov, a highly experienced banker, at present the President of JSC Bank 'Tajikbankbusiness'.

The present Chairman of the bank, Murotali Alimardonov, was appointed to this position on 8 December 1994, from the post of Chairman of the 'Shark' commercial bank.

Murotali Alimardonov graduated from the Tajik State University in 1983, from the Finance and Economics Faculty in the Department of Finance and Credit. He is 36 years old, married with six children. He is an advocate of the market economy, has the mind of a reformer, is optimistic by nature and plans to establish close contacts with foreign investors for supplementary funding of the Tajikistan economy in the near future.