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Abstract
The beginnings of reform of the nation's banking sector were in 1992, when the existing state banks of Turkmenistan were transformed, and a network of commercial banks began to develop. The first steps were taken to separate the budget and banking spheres. In effect, in 1992 a three-tier banking system was established in the country: 1. the Central Bank, 2. state banks, and 3. commercial banks. The operations of the banks of each tier had specific features, reflecting their functions, the conditions in which they developed and use credit resources, and forms of regulation and control. Turkmenistan currently has a two-tier banking system, typical of countries with a market economy. The upper tier of the national banking system is represented by the Central Bank; the lower, or second, tier comprises commercial banks. From mid-1996 Turkmenistan's authorities directed their efforts at consistent implementation of a tight monetary policy.