Tag Archives: central bank

Georgia’s CBank maintains rates

DEC. 14 2016 (The Conway Bulletin) — Georgia’s Central Bank slowed its interest rate cuts by keeping its key rate steady at 6.5% at its latest rate fixing meeting. It said that an increase in excise taxes and external factors would help lift prices temporarily although, there- after, price pressure will return. Inflation in Georgia stands at 0.2%, far below the Central Bank’s 5% target. It has cut its key interest rate from 8% at the start of the year.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Reserves drop in Kazakhstan

NOV. 10 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank said its international reserves fell by 2.9% in October to $30.5b, the first decline in four months. Since the beginning of the year, reserves have grown by 13.8%, the Central Bank said. Last year the Central Bank spent a large proportion of its reserves trying to prop up its currency. This year, though, under a new Central Bank chief, the strategy has changed and the Bank has stepped away from intervention.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Kazakh C. Bank aims to hire foreign managers

OCT. 28 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank aims to hire foreign managers to oversee spending of the foreign currency- denominated element of its pension fund, worth around $5b. The hiring process could kick-start next year, according to one source at the Central Bank. Foreign currency-denominated assets make up around 21% of the $20b pension fund. The Central Bank aims to increase the share to 23% this year.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Georgian C. Bank keeps rates steady

OCT. 26 2016 (The Conway Bulletin) — Georgia’s Central Bank kept its key interest rate at 6.5% but said that it would lower it to 6% by the end of Q1 2017. It said that inflation and both consumer and business demand had slowed but that it was too early to cut rates now as the economy was still dealing with a previous cut. Annualised inflation in September measured 0.1% compared to a target of 5%.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

Kyrgyz Central Bank keeps rate unchanged

SEPT. 26 2016 (The Conway Bulletin) – Citing falling prices and signs that the economy is beginning to grow again, Kyrgyzstan’s Central Bank kept interest rates unchanged at 6%. The Central Bank said that only by keeping rates at 6% will it be able to let prices increase gently, within a 5-7% corridor. This year, the Central Bank has reduced interest rates twice from a level of 10% in January.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Armenia’s C Bank cuts interest rates

SEPT. 27 2016 (The Conway Bulletin) – Armenia’s Central Bank cut interest rates by 50 basis points to 6.75%, in an effort to combat deflation. The Bank said that after a positive first half, the economy slowed significantly in Q3. This is the sixth time this year that the Central Bank has cut interest rates. At the beginning of 2016, interest rates stood at 8.75%.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Business comment: Kazakh banking

SEPT. 21 2016 (The Conway Bulletin) – Despite countless declarations on efforts to save its banking sector, Kazakh banks are not as healthy as they say.

Last year, President Nursultan Nazarbayev instructed the Central Bank to conduct stress test to avoid a spiraling of non-performing loans similar to the crisis that followed the 2007/8 global debacle.

He had just sacked Kairat Kelimbetov, Mr Devaluation, the Central Bank chief under whom the tenge currency lost around half its value in two years.

The result of the declarations has been a sharp drop in the share of

bad loans in banks’ total portfolio. Officially, this week Kazakhstan’s Central Bank chief Daniyar Akishev said that non-performing loans had shrunk from around 30% two years ago to just 8.4%.

This raised eyebrows among analysts.

How could a broken system, hit by currency depreciation and toxic assets, recover so quickly, without undergoing a serious makeover?

The answer is simple, according to some: The problems were swept under the rug.

“Kazakhstan’s banking sector is a legalised zombie park,” an anonymous economist told Forbes Kazakhstan.

“In reality, bad loans make up around 60% of the total loan portfolio. But through refinancing, on paper, banks have written most of them off of their accounts.”

Notably, the most frequent and well attended protests in Kazakhstan for the past few years are organised by groups of mortgage holders. They mainly hold US dollar debt.

If their overdue loans are neither being refinanced, nor being accounted for, where are banks hiding them?

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Georgia’s Central Bank cuts interest rates

SEPT. 7 2016 (The Conway Bulletin) — Georgia’s Central Bank cut interest rates by 25 basis points to 6.5%, the fourth rate cut in five months. The Central Bank has said it wants to lower interest rates further to prop up economic activity. In April, before the first cut, Georgia’s key interest rate stood at 8%. Georgian interest rates have yoyoed from 4% for most of 2014, climbing sharply to 8% before being lowered.

ENDS

(News report from Issue No. 295, published on Sept. 9 2016)

Armenia’s CBank cuts interest rates

AUG. 16 2016 (The Conway Bulletin) — Armenia’s Central Bank cut its key interest rate to 7.25% from 7.5% to help counter falling consumer prices, the lowest rate since 2014. Annualised deflation in Armenia measured 1.3% at the end of July, the Central Bank said, a trend that would continue.

ENDS

(News report from Issue No. 293, published on Aug. 29 2016)

Azerbaijan’s CBank raises interest rates to 9.5%

AUG. 8 2016 (The Conway Bulletin) — Azerbaijan’s Central Bank raised its key interest rate to 9.5% from 7%, its highest level since 2008, in an effort to bolster its currency.

Azerbaijan’s economy is based on oil, meaning that a fall in prices has hit its economy hard. Analysts have predicted a recession this year, the first since the 1990s.

The manat currency was devalued twice last year. It had been strengthening throughout 2016 but has lost around 10% of its value since June and is, according to Bloomberg, now one of the five worst performing currencies. The Central Bank increased its key interest rate to 5% from 3% in February.

ENDS

(News report from Issue No. 292, published on Aug. 12 2016)