OREANDA-NEWS. December 28, 2009. Turkmenistan is undergoing radical changes in the political, socio-economic and cultural spheres, developing intensively and making efforts to achieve new heights. A worthy place in the reform strategy is assigned to the banking system. The monetary reform that had been launched in market conditions in 2009 became a logical stage in the economic progress and a contribution to ensuring the stability of the financial system. The Central Bank of Turkmenistan commented on the outcomes of the denomination

On January 1, 2010 the coins and banknotes of the old design will stop serving as the means of payment. To date, the non-denominated manats of the old design have been withdrawn from circulation, the new money makes up over 98 percent of total cash in circulation. By the end of 2010 the old money can be exchanged at all the banks in the territory of Turkmenistan.

The money turnover and inflation are under strict control in the country today. Turkmenistan manat has become one of the most stable currencies in the region. The achievements gained are a direct result of the balanced, well thought-out policy pursued by the Turkmen leader to ensure intensive economic growth and sustainability against an adverse external impact, to enhance Turkmenistan’s position on the world market.

The denomination of the national currency had a positive influence on money circulation to some extent: it reduced the nominal amount of money, simplified the payment for goods and services and cash and non-cash accounting procedures. The prices for basic goods remain stable. Stability of the national currency and stability of the national economy were the main sources of steady improvement in people’s welfare.

The Central Bank took the measures to change the face value of the Turkmen currency to ensure the success of the denomination of the national currency.

Since the denomination was launched the old current money has been replaced with the banknotes and coins of the 2009 design in accordance with the preliminary estimations of the Central Bank of Turkmenistan.

The most important goals of the monetary reform include bringing the level of protection and the nominal structure of the national currency in compliance with international standards. Such factors as the climate of the country, money circulation schemes, the threat of fraud of various types, a certain degree of recognition of security features in the banknotes of different denominations, the optimal size of the currency notes were taken into consideration when using the protection elements in banknotes.

To diminish the nominal value of banknotes the most ‘soft’ and economical method of denomination successfully tested in foreign countries was used. The basic principles of this method are protection of money owners from any losses and gradual replacement of paper money during circulation.

The experts of the international financial organisations, including the International Monetary Fund, highly evaluated the results of the monetary and currency reforms launched by the leader of the Turkmen state President Gurbanguly Berdimuhamedov.

A logical continuation of the currency reform will be putting the coins in the denominations of 1 and 2 manat into circulation on the first day of 2010. The presentation of the new coins took place at the Central Bank of Turkmenistan on November 1 – the birthday of the national currency and monetary system. The new bimetallic coins made of the alloys of several metals – brass, nickel and copper were mint by the British Royal Mint. The banknotes in the denomination of 1 manat will be in parallel circulation with the new coins of 1 manat.

Last month the main financial document of the country – the 2010 State budget that will ensure the high economic growth rate through intensive development of all industries as well as investments in the country was adopted. It should be noted that over 74 percent of the State budget funds will be spent for the social sphere. In accordance with the Decree of President of Turkmenistan salaries, pensions, state benefits and scholarships will be increased by 10 percent on average. All this will be taken into consideration by the Central Bank of Turkmenistan when planning the monetary and monetary policy.