MARCH 3 2014 (The Conway Bulletin) — A new law in Russia means 220,000 Armenian workers will shortly have to return home, cutting remittance flows, media quoted demographic analyst Ruben Yeganyan as saying. From Jan. 1, Russia will allow casual labourers to stay only 90 days in a 180-day period. Remittances from Russia are a vital income for many Armenian families.
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(News report from Issue No. 174, published on March 5 2014)
FEB. 20 2014 (The Conway Bulletin) — If the Kazakh Central Bank’s decision to devalue the Kazakh tenge by 20% on Feb. 11 came as a nasty surprise, the admission by Kairat Kelimbetov, the Bank’s chief, that he had only learned of the policy shift the night before came as a frightening shock.
Readers left floods of angry comments on news websites on the apparent ineptitude of Mr Kelimbetov.
“If he didn’t know, it means he doesn’t work at all! What an irresponsible (man),” wrote one user.
The Kazakh Central Bank is supposedly in charge of the country’s monetary policy and the constitution enshrines its independence.
And yet here was the Mr Kelimbetov saying that he’d only been informed about a policy change at the last moment. Many suspect that Kazakh President Nursultan Nazarbayev, in power since 1991, influences monetary policy.
Even so, it was a PR disaster for Mr Kelimbetov, said Eldar Madumarov, an economics professor in Almaty.
“It used to be regarded as the most independent and reliable Central Bank among all post-Soviet countries, including Russia,” he said. “All he’s been saying undermines his credibility.”
The Kazakh President, with approval from the Senate, appoints the Central Bank chief. Mr Kelimbetov took over as head of the Kazakh Central Bank in October last year from Grigory Marchenko, who was considered a steady hand.
Mr Kelimbetov’s reputation appears to be in tatters as Svetlana Dzhalmagambetova, a senator, voiced when she faced him at a Senate hearing on the devaluation.
“We need to know if you lack professionalism or ethics, it’s one of the two,” she said according to reports. “You misled not only the people of Kazakhstan, but also their representatives here in the Parliament.”
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 23 2014 (The Conway Bulletin) — More employers in Kazakhstan said they would increase workers’ salaries after the 20% devaluation of the tenge this month. Copper producer Kazakhmys and the government of Aktobe region both said they would increase salaries by 10%. The devaluation has stoked fears of inflation.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 18 2014 (The Conway Bulletin) — Betraying ordinary Kazakh’s nervousness and distrust after the devaluation of the tenge on Feb. 11 by 20%, rumours of a banking collapse spread fast via SMS and triggered a run on several banks.
The banks — Bank Tsenter Kredit, Alliance Bank and Kaspii Bank — all denied that they were in danger of collapsing.
At branches of Kaspii Bank, though, hundreds of people still queued throughout Feb. 18 and Feb. 19 to withdraw their savings despite assurances from the Central Bank that there was no reason to panic.
Saltanat was one of roughly 100 people queuing to withdraw their savings from a Kaspii Bank branch in Almaty.
“They said there won’t be any problem, but why should I believe them?” he said. “They said nothing about the devaluation either. They’re not going to take our money away!”
Confidence in Kazakhstan’s banking sector and the tenge is low.
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(News report from Issue No. 172, published on Feb. 19 2014)
FEB. 14 2014 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev ordered officials to pump $5.4b into the economy from the national reserve fund to boost growth in 2014 and 2015. Mr Nazarbayev said he wanted to maintain growth rates of 6-7%. His interjection underlines the fragile state of Kazakhstan’s economy.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 172, published on Feb. 19 2014)
FEB. 15 2014 (The Conway Bulletin) — The sudden 20% devaluation of the Kazakh tenge on Feb. 11 generated anger and despair across Kazakhstan.
Police detained roughly 50 protesters in rare antigovernment demonstrations in Astana and Almaty and rumours of an imminent collapse triggered a run on several high street banks.
In central Almaty the manager of a store selling underwear could barely constrain herself. She had no customers and was angry.
“This devaluation is terrible and we don’t want it. In our store, prices will not increase, but the cost of living will surely soar,” she said.
At a clothing store in a busy shopping mall, Gaukhar shared this view.
“This could turn into a nightmare,” said the shop assistant. “While prices will undoubtedly increase, we haven’t heard a word from our directors to raise our wages.”
One of the big fears for Kazakhstan’s policy makers is that rather than making the economy more competitive, the devaluation will simply stoke inflation. Some large industries, including the steel plant owned by the Luxembourg-based ArcelorMittal has already said it will increase its workers’ salaries by 10%.
There were mixed signals in Almaty. Many shopkeepers said that they hadn’t yet put up their prices but that they soon would.
“There’s already been a significant change in prices of between 500 and 1,000 (tenge) per pair of shoes,” said Assel as she tendered to her shop in Almaty’s Green Bazaar. “We’ve seen a lower turnout of customers this past week. They come in, try on the shoes but then go out empty-handed.”
Assel’s shoes were imported mainly from China and an increase of 500 to 1,000 tenge per pair represented a rise of roughly 20%.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 172, published on Feb. 19 2014)
FEB. 15 2014 (The Conway Bulletin) — In the week since the Kazakh Central Bank decided to de-value the tenge by 20%, prices in shops have risen, stoking fears of inflation. A Conway Bulletin correspondent in Almaty interviewed shoppers and stores owners for their feelings on the devaluation.
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(News report from Issue No. 172, published on Feb. 19 2014)
FEB. 11 2014 (The Conway Bulletin) — Kazakhstan’s Central Bank devalued the tenge by 20% despite months of denial that it was contemplating a move. Pressure has been mounting on the tenge and other currencies in emerging markets because of a strengthening US dollar.
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(News report from Issue No. 171, published on Feb. 12 2014)
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.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 171, published on Feb. 12 2014)
FEB. 6 2014 (The Conway Bulletin) — The falling value of the Russian rouble is decreasing the amount of cash that Uzbeks working in Russia are able to wire home, media reported. Like other Emerging Markets currencies, the rouble has been slipping back against a strengthening dollar over the past few months.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 171, published on Feb. 12 2014)