Tag Archives: central bank

Azerbaijan CBank sells US dollars

APRIL 1 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank said it had spent more than $1b of its reserves defending the value of the manat currency since it devalued by a third in mid-February. The admission will be an embarrassment for the Central Bank as the devaluation was meant to relieve pressure on the manat and protect reserves.
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(News report from Issue No. 225, published on April 12015)

Kyrgyz Central Bank spends to defend som

MARCH 31 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank bought $11.4m worth of som to slow its devaluation, media reported, its third intervention in March. Kyrgyzstan, like other countries in the region, has been trying to manage a fall in the value of its currency.
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(News report from Issue No. 225, published on April 12015)

Georgia CBank keeps interest rates steady

MARCH 26 2015 (The Conway Bulletin) – Georgia’s Central Bank kept its key interest rate at 4.5%, confounding expectations of another rate rise to counter a fall in the value of its lari currency. The Central Bank said the current inflation rate did not merit a rate rise although it also said that a gradual devaluation would probably push prices up.
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(News report from Issue No. 225, published on April 12015)

Azerbaijan’s SOCAR needs $1b to build plant

MARCH 19 2015 (The Conway Bulletin) – SOCAR, Azerbaijan’s state energy company, said it will ask the Central Bank for a 1b manat ($925m) loan to build an oil, gas and petrochemicals plant. This is important because last year SOCAR delayed construction of the $16.5b plant because its funds had dried up.
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(News report from Issue No. 224, published on March 25 2015)

Georgian Central Bank props up lari

MARCH 19 2015 (The Conway Bulletin) – The Georgian Central Bank is continuing to support the lari currency, buying $40m to prop it up. This was the fourth Central Bank intervention to defend the lari currency this year. Since November, the lari has lost 29% of its value, media reported.
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(News report from Issue No. 224, published on March 25 2015)

Kazakhs expect devaluation

MARCH 18 2015 (The Bulletin) – Ordinary Kazakhs have lost faith in the Central Bank and are expecting a tenge devaluation, media quoted Halyk Bank CEO, Umut Shayakhmetova as saying. She said the proportion of savings held in foreign currency had now risen to 70%. The Central Bank has promised not to devalue the tenge.
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(News report from Issue No. 223, published on March 18 2015)

Georgia CBank wants loans restructured

FEB. 25 2015 (The Conway Bulletin) – Georgia’s Central Bank wants commercial banks to present plans to restructure US dollar loans to help them cope with the drop in the value of the lari. An estimated 60% of banks’ loans are held in foreign currencies making them more expensive to service.
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(News report from Issue No. 221, published on March 4 2015)

Georgia’s Ivanishvili criticises CBank chief

FEB. 26 2015 (The Conway Bulletin) – Bidzina Ivanishvili, Georgia’s former PM and its richest and arguably most powerful man, accused Central Bank chief Giorgi Kadagidze of not doing enough to protect the country from the economic downturn enveloping the region.

Inflation is rising in Georgia, the lari currency is falling in value and businesses are worried. This has all heaped pressure on the 34-year-old Mr Kadagidze, who has been in the top job at the Central Bank since 2009.

Mr Ivanishvili’s intervention will pile on more pressure.

“The Governor of the NBG (National Bank of Georgia), Giorgi Kadagidze, who was appointed by the previous government, led us with his inactivity and incorrect actions to the lari crisis,” he said in a statement released through an NGO he has set up.

A fall in oil prices and economic turmoil in Russia have triggered inflation across Central Asia and the South Caucasus.

Some economic experts argue that Georgia’s Central Bank could have done more to dampen the inflation; others have said the government is merely looking for a scapegoat and that Mr Ivanishvili’s intervention is destabilising.

Vakhtang Charaia, director of the Center for Analysis and Forecast at Tbilisi State University, said: “Ivanishvili’s statement could lead to political instability, which in turn would negatively affect Georgia’s investment climate.”
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(News report from Issue No. 221, published on March 4 2015)

Azerbaijan devalues manat by a third

FEB. 21 2015 (The Conway Bulletin) — Azerbaijan’s Central Bank cut the value of its manat currency overnight by a third in response to the falling value of the Russian rouble and the collapse in oil prices.

Many analysts said that a devaluation was long overdue although none expected such a sharp correction.

And, as a Bulletin correspondent reports from Azerbaijan, the devaluation has angered and frustrated local people. Ordinary people have watched as the value of their savings has plummeted, inflation has soared and economic growth rates have been cut.

This is the major risk that the Central Asian and South Caucasus economies run when trying to deal with an increasingly nasty economic downturn that has enveloped the region. They need to adjust their monetary policies while still retaining the trust of their populations.

Part of the problem has been the speed with which the economic downturn has hit the region.

Most Central Banks in Central Asia and the South Caucasus have allowed their currencies to depreciate slowly although Turkmenistan, and now Azerbaijan, have opted for a sudden devaluation this year.

Kazakhstan is still resisting another correction — it cut the value of its tenge currency by 20% last year — but it must now only be a matter of time before it succumbs.

(News report from Issue No. 220, published on Feb. 25 2015

Kyrgyz CBank leaves rates unchanged

FEB. 24 2015 (The Conway Bulletin) — Kyrgyzstan’s Central Bank left its key interest rate unchanged at 11% despite inflationary pressure from a devaluing currency and falling remittances from workers based in Russia. In February, Kyrgyzstan’s inflation was measured at 10.9%.
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(News report from Issue No. 220, published on Feb. 25 2015)