ASHGABAT: Turkmenistan is set to begin issuing government bonds for the first time, state television reported Saturday, as the hydrocarbon-rich central Asian country grapples with the impact of plunging commodities prices.
Turkmen President Gurbanguly Berdymukhamedov on Friday signed off on a resolution “on the issue, sale and redemption of government bonds” and ordered the government to make the appropriate changes to legislation, state television reported.
The report did not specify when the government of the reclusive country expects to begin issuing these five-year bonds.
An opposition-run media outlet speculated the bonds will be used to pay the salaries of state workers including teachers, as the government struggles to cope with the loss of revenue due to low prices for its oil and gas exports.
The former Soviet republic of Turkmenistan is home to the fourth largest known reserves of natural gas but has limited infrastructure to export its energy resources.
It currently supplies around half of China’s total natural gas consumption through a pipeline built by the China National Petroleum Company that began operation in 2010.
Russia’s Gazprom confirmed earlier this year it was winding down long-standing energy imports from the ex-Soviet state, leaving Turkmenistan facing a cash shortfall.
Turkmenistan has also sharply devalued its currency, the manat, in light of low prices for gas and oil due to a global supply glut, which make up more than 90 percent of its exports. Oil prices have plunged by more than 60 percent in the past 18 months.
The country is now building a $10 billion Turkmenistan-Afghanistan-Pakistan-India link expected to help ease energy deficits in South Asia.