I’m not an economics expert, but like most people I get the general idea of why black markets exist: A country has a fixed exchange rate which is on the slightly optimistic side, to say the least, but the real value of the currency and the goods it is chasing are different. Thus a black market begins, as those trading the currency try to get the real value for the currency rather than the artificially set official rate. Got it? Well travel enough in Central Asia and it will start to become second nature!
In 2009, following a period of hyperinflation, the Turkmen New Manat was introduced, and the exchange rate for a long time was 2.8 Turkmen Manat (TMT) to USD1. However in 2015, the government realised that this was unrealistic and increased it to TMT3.5 to USD1. The 3.5 rate was realistic for a while before the economic downturn really kicked in, which was in part due to domestic decisions but also in part because of the global decrease in commodity prices, namely gas. It certainly didn’t help that the biggest player in the region, Russia, was having a pretty hard time itself. And in early 2016, a black market appeared.
So, most importantly, you’re travelling to Turkmenistan and don’t want to get ripped off. What do I mean by ripped off? Well a bottle of Coke is around 6-9 Manat, which at the official rate of 3.5 is around USD2. However at the black market rate it can be a low as 25cents. Likewise a packet of pringles is an absurd 30 Manat, which is around USD$8.50, which at the black market rate is as low as USD$1.5 – a much more reasonable price.
Changing money on the black market in Turkmenistan can be dangerous however and one must be careful. Quite regularly money changers at local markets are arrested and imprisoned. Likewise, those trying to change their money with the changers are also detained and at best given large fines, at worst imprisoned or deported.
People at markets will offer to change money for you and of course most of the time these individuals are just desperate Turkmen trying to make some money for themselves and their families. However every so often police are impersonating money changers to trick vulnerable individuals or, more likely, you’re just being watched by the police.
The best way to change money is to speak to your local Turkmen minder. They may refuse if things are getting difficult, and if they are able to do it they will certainly take some off the top. Another way is to ask the staff at the hotel. Obviously you wouldn’t go up to the front reception and just openly ask, however a porter taking your bags to your room or a staff member having a sneaky smoke outside is a great stop.
Of course, there is one full proof way to get the best black market rate and not encounter any of the risks involved: travel with YPT! We have been travelling to the country for years and have direct connections to those who can give us the best rates.
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