SEPT. 2 2013 (The Conway Bulletin) — Inflation in Armenia continues to rise, bucking the Central Bank’s prediction it would fall after a 0.5% interest rate rise last month, media reported. For the year to the end of August, inflation in Armenia measured 9.3%, up from 8.5% in July. Last month, the Central Bank raised interest rates to 8.5%.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 5 2013 (The Conway Bulletin) — Kazakhstan’s Central Bank will invest 20% of a $120m state-managed pension fund in foreign stock markets over the next five years, Grigory Marchenko, head of the Central Bank, told Reuters in an interview. Kazakhstan aims to create the pension fund through the enforced merger of 10 private funds by the end of 2013.
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(News report from Issue No. 151, published on Sept. 11 2013)
SEPT. 11 2013 (The Conway Bulletin) — Serzh Sargsyan, the Armenian president, sent shock waves across the South Caucasus and Europe when he signed Armenia up for Russia’s Customs Union.
The Kremlin set up the Customs Union in 2011 to ease trade between its partners and to draw them in closer. Commentators have dubbed it a Eurasian Union to counter the European Union.
Until Armenia moved into the Customs Union, only Kazakhstan and Belarus had joined. Kyrgyzstan has said it will join and Tajikistan has also been eyeing up membership.
Few though predicted Armenia’s jump towards Russia.
Mr Sargsyan’s decision to move into the Customs Union was a snub for European diplomats.
It’s not, perhaps, that surprising though. Armenia has been casting around for friends to provide a bulwark against Azerbaijan and Turkey. Armenia is still officially at war with Azerbaijan over the disputed region of Nagorno-Karabakh. Turkey is a key Azerbaijan ally.
Russia has given financial and military support to Armenia and maintains a large army base in Armenia. Gazprom, the Russian gas monopoly, also owns 80% of Armenia’s gas distributor and has been trying to buy the outstanding 20%.
Even so, Armenia’s move into the Customs Union will be felt across the region for years.
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(News report from Issue No. 151, published on Sept. 11 2013)
AUG. 27 2013 (The Conway Bulletin) — Azerbaijan continued to buy gold in July, news agencies quoted the IMF as saying, part of its stated plan to increase its bullion reserves. As well as buying gold, Azerbaijan has also said that it wants to increase its portfolio of property and currencies.
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(News report from Issue No. 150, published on Sept. 2 2013)
AUG. 30 2013 (The Conway Bulletin) — Halyk Bank, Kazakhstan’s largest bank by lending, posted an 8.1% rise in the first half of 2013 compared to the same in 2012. Halyk Bank’s profit rose because of interest payments linked to an 18% rise in consumer loans, good news for the Kazakh banking sector which is recovering from the global financial crisis.
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(News report from Issue No. 150, published on Sept. 2 2013)
AUG. 28 2013 (The Conway Bulletin) — Keen to strengthen control over the tenge, the Kazakh Central Bank switched from managing the value of its national currency against the dollar to using an aggregated basket of currencies.
The US dollar will still make up 70% of the new basket, Kazakh Central Bank chief Grigory Marchenko said, but the euro will also make up 20% and the Russian rouble 10%.
This system is more in line with a currency basket used by the Russian Central Bank to determine the value of the rouble.
In July, the Central Bank came under pressure to devalue the tenge after it dropped to 154 to the dollar. Since then it has rebounded to about 152 tenge to the dollar.
This currency basket will give the Kazakh Central Bank more room to intervene in the markets to defend the value of its currency. It scrapped a managed corridor value for the tenge in March 2011.
Two years earlier, in February 2009 during the global financial crisis, the Kazakh Central Bank devalued the tenge by 21%.
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(News report from Issue No. 150, published on Sept. 2 2013)
AUG. 28 2013 (The Conway Bulletin) — Kazakhstan’s Central Bank ditched its US dollar peg for the Kazakh tenge in favour of a currency basket. Central Bank chief Grigory Marchenko said the currency basket breakdown would be: 70% US dollar, 20% euro and 10% Russian rouble.
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(News report from Issue No. 150, published on Sept. 2 2013)
AUG. 23 2013 (The Conway Bulletin) — Georgia’s economy will grow by only 4% this year, a drop from 6.5% in 2012, because of concerns over political instability, media said quoting the IMF. Bidzina Ivanishvili, Georgia’s richest man, won a surprise victory in a parliamentary election in 2012. A presidential election is scheduled for Oct. 27.
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(News report from Issue No. 150, published on Sept. 2 2013)
AUG. 23 2013 (The Conway Bulletin) — Toronto-listed Centerra Gold and the Kyrgyz government began negotiations over the ownership of the Kumtor gold mine in eastern Kyrgyzstan. The Kyrgyz government holds a 32.7% stake in Centerra Gold, which owns Kumtor, but it says it should own more of the country’s biggest industrial asset.
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(News report from Issue No. 149, published on Aug. 26 2013)
AUG. 19 2013 (The Conway Bulletin) — Georgia and Russia have made a deal to start up road freight and bus connections after they were cut seven years ago when relations between the neighbours soured, media reported. The deal is another significant step towards normalising Georgia-Russia relations after a brief war in 2008.
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(News report from Issue No. 149, published on Aug. 26 2013)