Financial System of Turkmenistan Maksat Keshiyev Central Bank
Financial System of Turkmenistan Maksat Keshiyev Central Bank of Turkmenistan Interbank Currency Exchange
CONTENT � 1. BRIEF ECONOMY REVIEW � 2. FINANCIAL SYSTEM OF TURKMENISTAN � 3. ISSUES AND CHALLENGES *Pictures 2
1. BRIEF ECONOMY REVIEW 1. 1. REGION SPECIFICATIONS � Region – Central Asia � Surface area (sq km) 491. 210 � Population (est. , 000) 6000 � Pop. density (per sq km) 12. 2 � Capital city Ashgabat � Capital city pop. (est. 000) 900 3
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1. 2. MACROECONOMY DATA* *(from the open sources - web) � Currency Turkmen Manat (TMT) 1 manat = 100 tenge � Official exchange rate � GDP (est. ) � GDP per capita (est. ) � Inflation 3, 5 TMT / 1 USD $93, 27 bn $15. 545 (est. ) 4 – 6 % 5
� Exports (est. ): $11. 9 bn � Export goods: natural gas, crude oil and petrochemicals, textiles, cotton fiber � Main export partners: China, Turkey, RF � Imports � Main (est. ) $10. 4 bn import partners: Turkey, RF, China, UAE 6
GDP growth 2013 – 2016 est. 35 30 25 Real GDP 20 Real nonhydrocarbon GDP 15 10 Consumer price index (period average) 5 0 2013 2014 2015 2016 est. 7
Additional data Total revenue Total expenditure and net lending Overall balance (+ =surplus) Reserve money Manat broad money Exports of goods State budget 2013 17. 1 15. 9 1. 2 Monetary indicators 13. 4 21. 3 2014 2015 16. 4 16 0. 4 2016 est. 16. 6 17. 3 -0. 7 14. 1 16 -1. 9 -15. 6 -0. 5 -5. 7 12. 7 16 5. 6 (In millions of US dollars, unless otherwise specified) External sector 18, 955 19, 340 11, 894 10, 059 Of which: Hydrocarbons 17, 825 18, 298 10, 705 8, 727 Imports of goods 14, 923 15, 197 10, 409 8, 673 2, 273 2, 387 1, 936 1, 646 12, 650 12, 810 8, 467 7, 028 3, 747 4, 146 4, 490 4, 692 -2, 983 -3, 098 -4, 413 -4, 805 -7. 2 -6. 7 -12. 3 -13. 3 Consumer goods and food Investment products Net Foreign Direct Investment Current account In percent of GDP 8
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TAPI natural gas pipeline 11
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2. FINANCIAL SYSTEM � Budget system MOF President Parliament 13
� Fiscal policy – MOF, Implementation – Tax Service � Insurance policy – MOF, Implementation – State Insurance Company � National accounting standarts – MOF (implementing IFRS) � National standarts on Audit - MOF � Regulating Securities Market – MOF � Establishing Stock Exchange – MOF 14
� Government � Oversight MOF Bonds – MOF of budget financing state entities – 15
� Monetary � Issuing policy - CBT national currency – CBT � Regulating CBT � Money and Supervising of banking system – circulation – CBT � National Payment Systems (Altyn Asyr), Clearing and Settlement – CBT � Foreign exchange regulation – CBT 16
� Interest Rates – CBT � Development of banking sector – CBT � Foreign reserves management - CBT � Price stability - CBT � Licensing of bankrelated businesses – CBT 17
The Banking System of Turkmenistan � 1 st level: Central Bank and its branch offices � 2 nd level: Commercial Banks with branches There are 13 commercial banks, most of them state owned LAW OF TURKMENISTAN “On Central Bank of Turkmenistan” Article 3. Central Bank of Turkmenistan (CBT) � 1. CBT shall be The National bank of Turkmenistan. � 2. CBT shall be accountable to President of Turkmenistan. � 3. CBT shall be led by Chairman of Central Bank of Turkmenistan. � Chairman of CBT, Deputy Chairmen of CBT shall be appointed to their positions and relieved of their duties by President of Turkmenistan. 18
� � � � 4. CBT shall make its expenses out of own incomes. 5. CBT shall exercise powers with respect to the ownership, use and disposition of capital and other assets of CBT in accordance with this law. The confiscation and encumbrance of such assets without the consent of CBT shall be prohibited, unless otherwise stipulated by this law and other regulatory legal acts of Turkmenistan. 6. CBT shall be a legal entity. 7. CBT shall have a seal depicting the coat of arms of Turkmenistan and bearing the inscription “Türkmenistanyň Merkezi banky". 8. The use of the abbreviation "TMB", as well as the word "Merkezi" in the names and logos of other lending institutions shall be prohibited. 9. CBT shall have the right to establish branches, representative offices, enterprises, institutions, organizations, to designate agents of CBT and correspondent banks in Turkmenistan and abroad in a manner established by the legislation of Turkmenistan. 10. CBT shall be the banker, the adviser and the fiscal agent of the Cabinet of Ministers of Turkmenistan. 11. CBT (central staff) shall be located in Ashgabat city. 19
The Interbank Currency Exchange of Turkmenistan (ICET) � ICET is the division of CBT � Established by Decree of The President #9847, 30. 05. 2008 � Staff: 10 officers, including Director and Deputy Director � 2 sections: 1. Marketing and Trading 2. Back office / Reporting division 20
Extra Info Development Bank of Turkmenistan � Money source – Stability Fund (surplus of a budget) � Financing infrastructure and major sectors of economy Pension Fund � Providing free resources to commercial banks 21
State Insurance Company � Providing free resources to commercial banks The Institute on Strategy Research � Providing government and state entities with economic research on major topics � The State University of Economy and Management � Close relations with state entities regarding economics, management and science issues 22
3. Issues and challenges � The National Program on Import Substitutions and Export boost (established 2015) � The National Program on Developing of Economy (2011 - 2030) � The National Program on Developing Agricultural Sector (2011 - 2030) � The National Program on Developing of Financial and Banking Sector (2011 - 2030) 23
� Flexible tariffs on imports barriers and export supporting � Regular adjusting procedures of National Programs depend on developments on the market (oil price, exchange rates of partner countries, global price of major export goods, changes in exp/imp policies of neighbor countries, etc. ) � Shifting from the crude exports to deep processing of carbon resources (joint ventures with developed economies in this field, including Republic of Korea) 24
*Pictures 25
*project 26
*project 27
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Kazakhstan-Turkmenistan-Iran railroad (functioning) 29
*project 30
New International Airport Ashgabat, 2017 31
Olympic Village, Ashgabat Hosting 5 th Asian Indoor and Martial Arts Games, 2017 32
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THANK YOU FOR ATTENTION 35
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