NOV. 11 2015 (The Conway Bulletin) – The social networking site LiveJournal will be available again in Kazakhstan, the government said. LiveJournal, which is popular in the former Soviet Union, was banned in August 2011 for “propagating terrorism and extremism.” Kazakhstan has been criticised for cracking down on free speech.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 11 2015 (The Conway Bulletin) — Azerbaijan’s state-owned energy company SOCAR said its joint venture with Dutch oil and gas services company Fugro will work on the modernisation of a refinery near Baku. SOCAR Fugro will provide geophysical and geotechnical services for the modernisation work. Azerbaijan has earmarked around $1b for reconstruction work on the country’s largest refinery.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 9 2015 (The Conway Bulletin) – Uzbekistan’s Central Bank dropped the value of its sum currency to 2,706 sum/$1, down from 2,635/$1, a drop of 2.6%. On the Black Market, the dollaruz.com website reported that the fall was even greater. Currencies across Central Asia are under increasing pressure from a fall in the value of commodities and a recession in Russia.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 10 2015 (The Conway Bulletin) – State workers in Kazakhstan will receive pay rises next year of 7-29% to offset the devaluation of the tenge, media reported quoting social development minister Tamara Duysenova. The figures show just how pronounced the anticipated devaluation-linked inflation is likely to be.
The tenge has fallen by 40% in value since its US dollar peg was ditched in August and analysts have warned of a corresponding surge in inflation.
This has already begun to seep through. The Central Bank said that annualised inflation jumped to 9.2% in October, double the rate in September. The announcement on the size of the state pay rises, though, suggests more price rises are likely.
Most of the state employees that Ms Duysenova said would receive a pay rise were doctors, nurses and teachers.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 11 2015 (The Conway Bulletin) — Petronas Carigali said it wants to increase oil production in the Turkmen section of the Caspian Sea. By year-end, output at the Diyarbekir offshore field should reach 10,000 barrels/day and the company plans to add another 7,000 barrels/day from the Garagol-Western Deniz field. Petronas Carigali is the Turkmen subsidiary of the Malaysian oil and gas company Petronas.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 11 2015 (The Conway Bulletin) — Beeline Kyrgyzstan, owned by Russia’s VimpelCom, posted Q3 profits up nearly 19% from Q2. Beeline said profit had risen because Kyrgyz were more relaxed about spending more on their mobile phones. Compared to last year, Beeline’s customer base was up only 1.7%. Analysts and businesses have said that in Kyrgyzstan, people are spending more and more time on their mobile phone surfing the web.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 9 2015 (The Conway Bulletin) – In a show of support for Georgia, Ukraine said it will fine anybody driving a car with a South Ossetian or Abkhazian number plate, media reported. Ukraine is locked in a war with Russia for control of the eastern part of its country. It counts Georgia as a strong ally. S.Ossetia and Abkhazia are Russia- backed Georgian rebel states.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 13 2015 (The Conway Bulletin) — The whole post-Soviet region has faced a steep economic downturn over the past year, leading to regional trade imbalances that have travelled across borders.
Initially, the fall in the value of the Russian rouble hit the Kazakh tenge. Despite a 20% devaluation in Feb. 2014, the tenge’s peg to the US dollar made it increasingly expensive against the rouble. When the rouble started to lose double- digit value against the US dollar, the tenge held its US dollar trading point, making it increasingly expensive. For the first eight months of this year, cheap Russia goods flooded Kazakhstan.
Eventually, in August, the Kazakh Central Bank effectively ordered another devaluation by ditching a US dollar peg. The graph below illustrates this clearly. It shows the rouble/$1 rate and the rouble/tenge rate matching each other until August. The value of the rouble, according to the graph, halves against the US dollar and the tenge.
In August, though, there is a sharp correction in the trading rate of the rouble/tenge. It diverges, violently almost, with the rouble/$1rate. The graph shows that the tenge is still stronger than the rouble compared to June 2014, but the differential is reduced.
And this is where the ripple effect carried through to neighbouring Kyrgyzstan.
Thee blue line on the graph represents the rouble/som rate. It, broadly, matches the peaks and troughs of the rouble/$1 rate, suggesting an informal peg to the US dollar.
The Kyrgyz Central Bank, though, has clearly tried to devalue the som independently too, as the rouble/som rate diverges slightly from the rouble/$1 rate.
The yellow line shows the tenge/som rate, and clearly depicts the change in relative values of the two neighbours’ currencies. The som has been weaker against the tenge for most of the year, as shown by the fairly shallow but pronounced trough. This changes after the tenge devaluation in August.
A currency domino effect, although slower than analysts had predicted, is rippling through Central Asia. The rouble is an optimal benchmark to observe this phenomenon.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 12 2015 (The Conway Bulletin) – Russia is not going to send guards back to patrol Central Asia’s border with Afghanistan, said Russian Colonel-General Alexander Manilov, despite worries the Taliban is spreading northwards. Russian border guards used to patrol the Tajik-Afghan border until 2005. Tajikistan has said it doesn’t want foreign border guards patrolling its frontiers.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 11 2015 (The Conway Bulletin) – Russia will install an air defence missile system in Armenia, RIA- Novosti news agency reported quoting a statement from the Kremlin, a rival, perhaps, to the US missile system in Eastern Europe. By stationing missiles in Armenia, Russia is pulling it tighter into its field of influence.
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(News report from Issue No. 256, published on Nov. 13 2015)