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Poor official data present a major problem for the assessment of sovereign risk. The Economist Intelligence Unit believes that foreign-exchange reserves will remain high in 2018-19, averaging about US$20bn, and providing 16 months of import cover. Cuts in subsidies and public-sector wage arrears point to potential weaknesses in the sustainability of the public finances in the long term. However, the external debt stock appears to be low.
We believe that the manat is massively overvalued compared with its regional peers. At the end of March the black market rate was more than four times the official rate of Manat3.5:US$1. We expect the authorities to devalue the manat by about 40% in the second half of 2019.
The banking sector is badly regulated and only limited data are available. Domestic debt markets are poorly developed. According to the IMF, credit policy is highly expansionary and is expected to grow in 2018-19. Government-directed lending will adversely affect financial soundness indicators.
We believe that the manat is massively overvalued compared with its regional peers. At the end of March the black market rate was more than four times the official rate of Manat3.5:US$1. We expect the authorities to devalue the manat by about 40% in the second half of 2019.
The banking sector is badly regulated and only limited data are available. Domestic debt markets are poorly developed. According to the IMF, credit policy is highly expansionary and is expected to grow in 2018-19. Government-directed lending will adversely affect financial soundness indicators.
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Country Risk Service Turkmenistan 2nd Quarter Updater
Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk
Central scenario for 2018-19: Political stability
Central scenario for 2018-19: Election watch
Central scenario for 2018-19: International relations
Central scenario for 2018-19: Policy trends
Accuracy of official data
Central scenario for 2018-19: Fiscal policy
Central scenario for 2018-19: Monetary policy
Central scenario for 2018-19: Economic growth
Central scenario for 2018-19: Inflation
Central scenario for 2018-19: Exchange rates
Central scenario for 2018-19: External sector
Key risk indicators
Ratings summary
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk
Central scenario for 2018-19: Political stability
Central scenario for 2018-19: Election watch
Central scenario for 2018-19: International relations
Central scenario for 2018-19: Policy trends
Accuracy of official data
Central scenario for 2018-19: Fiscal policy
Central scenario for 2018-19: Monetary policy
Central scenario for 2018-19: Economic growth
Central scenario for 2018-19: Inflation
Central scenario for 2018-19: Exchange rates
Central scenario for 2018-19: External sector
Key risk indicators
Ratings summary
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
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