Tajikistan suffered similar dislocation to other FSU countries from the collapse of the USSR, but also several years of civil war. It moved slowly towards a market economy and introduced its own currency only in 1995 (and with little success). It then embarked slowly and often reluctantly on structural reform and stabilisation, with a second new currency in 2000 and a gradual evolution towards modern monetary operations by the end of the period.

Years Targets and attainment Classification
1992-96 independence (out of USSR) late 1991, within ruble area; initial moves towards market economy half-hearted and/or obstructed by destructive civil war 1992-4 and 1996-7; local branches of USSR banks turned into central and specialised banks, some commercial banks owned by state enterprises; central bank lacking in expertise and power over other banks, with no framework for monetary control or banking regulation, imposes reserve requirements and tries to limit bank lending, but officially directed credits and membership of ruble area preclude independent monetary policy; collapse of inter-republican payments system, build-up of interenterprise arrears, cash shortages, high credit expansion; early 1994 currency reform aimed to replace pre-1993 with new Russian rubles although no agreement yet reached with Russia on monetary union, but large amounts of cash deposited in bank accounts and frozen so cash shortage worsened; late 1993 influx of pre-1993 rubles from other FSU countries now issuing own currencies; widespread wage payment arrears; new Tajik currency introduced mid-1995, with exchange rate set via auctions in new forex market; large rise in directed credits leads to loss of confidence, depreciation, demonetisation and dollarisation, while forex auctions at times replaced by administrative forex allocations; 1996 authorities struggle to regain control in face of floods and renewed fighting unstructured discretion UD
1997-2017 peace agreement mid-1997 allows return to reform and stabilisation, with forex auctions restarted (alongside curb market) and directed credits in theory no longer allowed; by late 1997 monetary  policy conducted mainly through refinance facility and forex interventions (no OMOs due to absence of treasury or central bank papers); many banks financially unsound; 1998-9 some disruptions to peace process; 1998 fall in world cotton price and Russian crisis lead to policy slippages with rising directed credits, latter banned late 1999 in policy correction but recovery of past credits difficult; treasury bill issues from late 1998, growth slow; improved banking supervision and regulation, some restructuring; new currency introduced October 2000; 2000-3 macro policies unevenly implemented, high quasi-fiscal activities, directed credits, banking system and monetary instruments remain weak; 2004 monetary policy more effective, directed credits again in theory prohibited, growing importance of remittances (mainly from Tajik workers in Russia); 2006-7 heavy borrowing from China for infrastructure projects; as of 2007 main monetary instruments are reserve requirements and issuance of central bank bills, exchange rate stabilised (but without intervention); 2008-9 GFC brings fall in remittances and economic growth, policy shifts towards more exchange rate flexibility and more emphasis on reserve money; 2009 special audit of central bank reveals major gaps in balance sheet; banking sector weakened, needs support and reform; financial markets still small and inactive, directed lending continues; 2015 adverse effects from Russian slowdown; increased forex market restrictions, long-standing official reluctance to promote growth of government securities markets, plus delays in dealing with financially unsound and poorly managed banks (some state-owned); mid-2017 forex market re-unified; 2017 rise in stock of government securities, introduction of standing credit facilities, talk of eventual move to inflation targeting, though monetary transmission remains weak loosely structured discretion LSD

Selected IMF references: RED 1994 pp1-2, 16-18, 26-7, 40-2; SR 1994 pp5-6, 8-9, 10; RED 1996 pp2-5, 24-9, 36-7, 101-4, 121-4; RED 1997 pp6-11, 35, 40-3, 52-4; SR 1998 pp5, 6-11, 16-17; RED 2000 pp4-5, 27-31; SR 2001 pp8, 15-17; SISA 2002 pp5-13; SR 2002 pp10-11; SISA 2005 pp36-7; SR 2005 pp9, 12; SR 2007 pp7, 8, 10; SR 2009 pp12-15, 20; SR 2011 pp9, 12-13, 16; SR 2013 pp5, 8, 12-13; SR 2015 pp5, 10-13, 44-8; SR 2017 pp8-9, 17-18, 31-2.

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