Tag Archives: central bank

Kazakh Central Bank keeps interest rates steady

JUNE 9 2021 (The Bulletin) — The Kazakh Central Bank kept its interest rate at 9% because of higher-than-hoped-for inflation. It said that inflation will exceed its 4-6% target corridor this year because of high commodity prices but that GDP growth would be between 3.6% and 3.9%, a slight rise on an earlier estimate.

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— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

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Azerbaijan cancels licence of another insurance company

MARCH 12 (The Bulletin) — Azerbaijan’s Central Bank, the country’s financial regulator, cancelled the trading licence of Ravan Sigorta, an insurance company. This is the third licence of an insurance company that the Azerbaijani Central Bank has cancelled this year. The authorities in Azerbaijan have been pruning its financial sector of banks and other institutions that it considers to be too weak to survive another financial jolt.

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— This story was published in issue 475 of the Central Asia & South Caucasus Bulletin, on March 15 2021

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Uzbekistan keeps interest rates steady, says inflation is too high

MARCH 11 (The Bulletin) — Uzbekistan’s Central Bank declined to cut its key interest rate from 14% because it said that inflation was still too high. Inflation in Uzbekistan is currently at 11.4%, pushed up by rising domestic demand, an increase in global food prices and a rise in fuel prices. Uzbekistan’s interest rate has measured 14% since mid-2020.

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— This story was published in issue 475 of the Central Asia & South Caucasus Bulletin, on March 15 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Kyrgyzstan increases interest rate by 0.5%

FEB. 24 2021 (The Bulletin) — Kyrgyzstan’s Central Bank increased its key interest rate by half a percentage point to 5.5% to counter rising inflation, its first rise since February 2020. The coronavirus pandemic and a coup in October has pressured the Kyrgyz som which is trading at around 84/$1, a fall of around 20%. This fall in the value of the som has pushed up inflation.

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— This story was published in issue 474 of the Central Asia & South Caucasus Bulletin, on March 5 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Armenian Central Bank raises interest rate to support currency

FEB. 2/3 2021 (The Bulletin) — Armenia’s Central Bank raised its key interest rate to 5.5% from 5.25% to strengthen its currency, the dram, which has dropped 6% since it lost a war against Azerbaijan for control of Nagorno-Karabakh last year. In neighbouring Georgia, the Central Bank there kept its key interest rate steady at 8% because it said that inflation had stalled because of the pandemic. 

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— This story was first published in issue 471 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Kazakhstan to set up monetary policy committee in Central Bank

ALMATY/JAN. 21 2021 (The Bulletin) — In an attempt to both modernise the Central Bank’s decision-making process and to inject some confidence into its currency, Kazakhstan set up a Monetary Policy Committee that will oversee interest rate setting decisions and inflation targets.

When it comes into operation later this year the committee will be the first focused on monetary policy in Central Asia and will, eventually, include independent economists.

“The establishment of the Monetary Policy Committee is in line with the best practices of inflation–oriented countries and will increase the efficiency and transparency of monetary policy decisions,” the Central Bank said in a statement.

Like other currencies in the Central Asia and South Caucasus regions, the impact of the coronavirus pandemic has buffeted Kazakhstan’s tenge, forcing it down to below 450/$1 in March last year from around 380/$1 in January. It is now trading at 420.4/$1.

Confidence in the tenge was already weak before the coronavirus pandemic as the Central Bank was blamed for its collapse in 2014 after a sharp fall in oil prices.

And it was perhaps with this in mind that Kazakh President Kassym-Jomart Tokayev ordered, in September last year, a Monetary Policy Committee to be set up. The order also came during a more general modernisation of the Kazakh Central Bank. It has dusted off plans to shift its headquarters to Nur Sultan from Almaty. The original plan was scrapped in 2015 after the economy went into recession.

On its new Monetary Policy Committee, analysts said that the Central Bank needs to move quickly to bring in independent economists. And the Central Bank agreed.

“In the medium term, the Committee will include independent members who specialise in macroeconomics and monetary policy and have extensive experience,” it said.

In its last interest rate setting decision, in December last year, the Kazakh Central Bank kept its core interest rate at 9%, saying that inflation was stable.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Azerbaijan commissions new Central Bank HQ

JAN. 15 2021 (The Bulletin) — In a show of confidence in its Central Bank which was derided by ordinary Azerbaijanis six years ago for allowing the manat to devalue twice in 12 months, Azerbaijan’s government commissioned the construction of a new $265m and 37-storey headquarters for it. Building work, by Turkish construction company Tekfen, is expected to take three years.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Georgia sells US dollar reserves to prop up lari currency

MARCH 26 (The Bulletin) — In Georgia, the Central Bank sold $140m of its currency reserves to prop up its ailing currency and also released a statement which said that its economy would recover once it has come through the fallout of the coronavirus. 

All shops have been closed, other than pharmacies and food shops. As reported on page 5, Georgia’s important tourist industry is facing collapse. Estimates said that 9m people visited Georgia in 2019, double the number from 2012.

The government has not yet downgraded its GDP growth estimates for 2020 but analysts said they expected this to happen within the next few days.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Inflation in Kazakhstan is building, says Central Bank

DEC. 9 (The Bulletin) — Kazakhstan’s Central Bank kept interest rates at 9.25% and warned that inflationary pressure was building. It said that the weak tenge, which is bumping along at all-time lows, and a growing current account deficit was an inflation risk. Inflation is currently at around 5.5% but is expected to rise to 6% next year. >>See page 8 for more
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— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019

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Kazakhstan raises interest rates for first time since 2016

ALMATY/Oct. 16 (The Conway Bulletin) – Kazakhstan’s Central Bank raised its key interest rate for the first time in 2-1/2 years because of the rising threat of inflation, highlighting growing concern in the region that price rises may wipe out tentative economic gains made since a 2014-17 downturn.

Announcing the rate rise to 9.25% from 9%, Kazakh Central Bank chief Daniyer Akishev said inflation was currently sitting at 6.1%, square in the middle of the government’s 5-7% target for the year, but that pressure was building.

“Today’s decision, in our opinion, will reduce the severity of the problem,” he said. “The new level of base rates will increase the demand for tenge assets and bring monetary and credit conditions to a level close to neutral.”

Kazakhstan is the biggest economy in Central Asia and had looked to have made a reasonable recovery from a sharp economic downturn between 2014 and 2017 that was triggered by a collapse in oil prices and a recession in Russia. Over the last few months, though, the Kazakh tenge has come under pressure, dropping to its lowest level since the start of 2016. Analysts said global insecurity and concern over Emerging Markets have hit the tenge.

The Kazakh Central Bank last increased its core interest rate in February 2016 when it raised it by 1 percentage point to 17%. From then it slashed interest rates to 9% to stimulate growth.

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>>This story was first published in issue 388 of The Conway Bulletin on Oct. 17 2018