Turkmenistan to introduce 100% mandatory forex sales

ASHGABAT, May 18 (Reuters) - Turkmenistan will force local companies to sell all of their export proceeds to the country’s sovereign fund, up from the previously required 50%, state television reported on Monday.

The further tightening of foreign exchange controls could indicate a worsening of hard-currency shortages in the tightly controlled and isolated country, whose main source of income is gas exports to China.

President Kurbanguly Bedymukhamedov, according to the state television report, called the controls a temporary measure and also ordered his cabinet to review the state budget.

The mandatory foreign currency sales are made at the official rate of 3.5 manats per dollar. On the black market, the dollar changes hands for 21 or 22 manats.

PetroChina, the main buyer of Turkmen gas, suspended some purchases in March as a seasonal plunge in demand added to the impact on consumption from the coronavirus outbreak.

Turkmenistan also resumed gas exports to Russia last year but their volume remains low. (Reporting by Marat Gurt, writing by Olzhas Auyezov, editing by Larry King)