Tag Archives: central bank

Azerbaijani devaluation angers people

FEB. 21 2015 (The Conway Bulletin) — Azerbaijan’s Central Bank slashed the value of its manat currency by a third overnight, a sudden move that took businesses and ordinary Azerbaijanis by surprise.

Previously Azerbaijani officials had said that they would release the manat from its dollar peg, suggesting only a gradual devaluation to adjust to a sharp decline in the Russian rouble.

They have now justified the sudden devaluation by saying that they had little choice but to act in the face of a collapse in oil prices and economic turbulence in Russia.

“This decision was made in order to support diversification of Azerbaijan’s economy, strengthen its international compatibility and export potential as well as to provide balance of payments sustainability,” the Central Bank said in a statement.

On the streets of Azerbaijan’s towns, though, the devaluation was less generously viewed.

Veli, 29, a small business owner in Guba, a northern city, told a Bulletin correspondent that he was in shock.
“I believed the government. I kept my savings in the manat,” he said. “I lost third of my savings. It’s painful. It’s theft by the government.”

He said that he had no choice but to increase the price of the electronic goods he was selling in his shop — fuelling rising inflation.

Sahiba, a mother of two young children living in the city of Gazakh on the western border with Georgia echoed these sentiments. Her husband is a government official but has had his pay cut already this year.

“We’ve got a mortgage,” she said. “I don’t know what we’ll do.”

ENDS
Copyright ©The Conway Bulletin — all rights reserved

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

Georgia CBank props up lari

FEB. 24 2015 (The Conway Bulletin) — In an effort to stop its currency from sliding further, the Georgian Central Bank said it had sold another $40m of its reserves. This is the third time this month it has sold US dollar reserves to prop up its lari currency.
ENDS
Copyright ©The Conway Bulletin — all rights reserved

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

Georgia Central Bank increases rates

FEB. 11 2015 (The Conway Bulletin) — As expected, Georgia’s Central Bank increased its key interest rate by 50 basis points to 4.5% to try and dampen inflation. The Georgian lari has lost 8.5% of its value against the US dollar this year, increasing inflationary pressures.
ENDS

(News report from Issue No. 219, published on Feb. 18 2015)

Kyrgyz Central Bank spends heavily

FEB. 17 2015 (The Conway Bulletin) — Kyrgyzstan has spent around 10% of its currency reserves this year defending its currency from devaluing, media quoted the chairman of the Central Bank, Tolkunbek Abdygulov, as saying. The Kyrgyz som is closely linked to the Russian rouble and has devalued against the US dollar by around 20%.
ENDS

(News report from Issue No. 219, published on Feb. 18 2015)

Azerbaijani Central Bank spends heavily

JAN. 13 2015 (The Conway Bulletin) — Azerbaijan’s Central Bank said it spent $1.13b in December supporting its national currency — the manat — counter a falling Russian rouble and a drop in global oil prices. This represents about 8% of its total currency reserves.

ENDS

(News report from Issue No. 214, published on Jan. 14 2015)

No devaluation says Kazakh Central Bank

NOV. 7 2014 (The Conway Bulletin) – Kairat Kelimbetov, head of the Kazakh Central Bank, said the tenge currency would not be devalued for at least three years. The comments, made at a conference in Almaty, were the strongest indicator yet that, despite a falling rouble, the tenge would not devalue for the second time this year.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

No devaluation says Kazakh Central Bank Chief

JUNE 2 2014 (The Conway Bulletin) -Rumours of another devaluation of the tenge triggered a spike in demand for dollars, media reported. The buying of dollars forced Kazakh Central Bank chief Kairat Kelimbetov to step in and deny that another tenge devaluation was planned. Kazakhstan devalued the tenge by 20% earlier this year.

ENDS

(News report from Issue No. 187, published on JUNE 4 2014)

The Kazakh Central Bank devalues the tenge

FEB. 11 2014 (The Conway Bulletin) — On what has been dubbed “Black Tuesday”, Kazakhstan’s Central Bank devalued the tenge by 20%.

The sudden move was designed to relieve pressure on the currency, despite Central Bank chief Kairat Kelimbetov saying for months that a devaluation was not on the cards. Last month he even urged Kazakhs to save more in tenge.

With the United States preparing to increase interest rates, the dollar has been strengthening and currencies in emerging markets have been under increased pressure. It had only been a matter of time before the Kazakh tenge flinched but the sudden drop will still have major consequences.

Mr Kelimbetov’s credibility has been badly damaged. He’s only been in the job since October so he’s still a relative novice. Longer term, the depreciation shows the tenge as weak and unstable.

Most of Kazakhstan’s imports are designated in dollars and so inflation is expected to rise fast; the depreciation of the tenge has also wiped out millions of dollars of ordinary Kazakhs’ savings.

This is the second sharp tenge devaluation in five years and there is a real chance that ordinary Kazakhs won’t trust the currency again.

In Almaty, some ATM machines stopped working for a couple of hours after the announcement and shops closed for the day. The public was worried.

Ainur, an Economics undergraduate said she was “concerned about a possible hike of her tuition fees. Gulmira, the administrator of a busy grocery shop, said prices had not yet increased but would soon. Near to her shop, electronics stores had taken down their price tags. Their websites were also closed for business.

On twitter, there has been talk of demonstrations against the devaluation. Feelings are running high.

(News report from Issue No. 171, published on Feb. 12 2014)

Azerbaijan warns banks over loans

JAN. 23 2014 (The Conway Bulletin) — Azerbaijan’s Central Bank issued a stern warning to its domestic banks to tighten up checks they carry out on consumers before issuing loans. The Azerbaijani economy is booming but increasingly unsecured loans could derail this growth.

(News report from Issue No. 169, published on Jan. 29 2014)

Azerbaijan’s Central Bank worries over bad loans

JAN. 24 2014 (The Conway Bulletin) — Azerbaijan’s Central Bank ordered domestic banks to stop giving out loans to consumers so easily.

In a strongly worded statement, Azerbaijan’s Central Bank said lenders had not been doing enough due diligence on the financial security of consumers they were lending cash to.

“The Central Bank has assigned banks to intensify activities on issue of loans and enhance control over the field in line with responsible lending principles with an eye to further amplify banking sector’s financial sustainability,” the Azerbaijani Central Bank said.

The Central Bank appears to be reacting to a number of warnings from analysts who said that poorly secured loans and rising consumer debt are major risks to Azerbaijan’s economy.

Azerbaijan’s fuel-powered economy has picked up pace again since stumbling during the global economic crisis of 2008/9. In 2014, the economy is expected to grow by around 5%.

But overconfidence and slack controls threatens this economic growth. The Central Bank’s own figures showed that lending to consumers increased by nearly a third last year.

The Central Bank also appears to accuse commercial banks of aggressively selling loans to consumers and also warned them not to give out misleading information over the financial responsibilities of taking out loans.

(News report from Issue No. 169, published on Jan. 29 2014)