Discusses the most common methods of payment, such as open account, letter of credit, cash in advance, documentary collections, factoring, etc. Includes credit-rating and collection agencies in this country. Includes primary credit or charge cards used in this country. Also includes information on Foreign Exchange controls and Banking Systems, and U.S. Banks & Local Correspondent Banks.
Methods of Payment
Bank transfers and Letters of Credit are the most common methods of payment. For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide available at https://www.trade.gov/trade-finance-guide-quick-reference-us-exporters
The largest state banks include: the State Bank for Foreign Economic Relations (Vnesheconombank), Dayhanbank, Turkmenbashy Bank, Turkmenistan Bank, and Halk Bank. These banks have narrow specializations—foreign trade, agriculture, industry, social infrastructure, and savings and mortgages, respectively. Senagat Bank took over Garagum Bank in 2017 and now is the sole remaining local bank providing general banking services for businesses. In September 2011, the government established the State Development Bank to provide loans to state-owned and private enterprises implementing projects that increase production and create jobs. The government also established Rysgal Bank in 2011 to provide general banking services to the members of the Union of Industrialists and Entrepreneurs.
There are also five foreign commercial banks in the country: a joint Turkmen-Turkish bank (with Ziraat Bank), a branch of the National Bank of Pakistan, German Deutsche Bank and Commerz Bank, and a branch of Saderat Bank of Iran. The two German banks provide European bank guarantees for companies and for the Turkmen government; they do not provide general banking services. Companies increasingly report dealing with vendors only in cash as vendors have difficulties accessing their money in bank accounts. More detailed information on the payment system of Turkmenistan is available in English at the website of the Central Bank of Turkmenistan (https://www.cbt.tm/en/).
Turkmenistan redenominated its national currency – the manat – and reduced the face value of bills by a factor of 5,000 at the beginning of 2009. The exchange rate was fixed at 2.85 Turkmen manat per 1 USD until January 1, 2015, when it was devalued to 3.5 manat per 1 USD.
The government strictly controls foreign exchange flows and limits on currency conversion make it difficult to repatriate profits or make payments to foreign suppliers. In 2019, the black market rate was relatively steady at around 18 manat/dollar, roughly 5 times the official rate. The COVID-19 pandemic put additional pressure on Turkmenistan’s hard currency reserves and caused the black market rate to spike as high as 25 manat/dollar in the first part of 2020.
US Banks & Local Correspondent Banks