Tag Archives: economy

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)

Remittances in Tajikistan fall, again

JULY 25 2016 (The Conway Bulletin) — Tajikistan’s Central Bank said that the flow of remittances from abroad fell by 22% in the first half of 2016, compared to the same period last year. The Bank said that a sustained recession in Russia has slashed the value and the volume of remittances. Tajikistan is one of the world’s top remittance-dependent countries. Tajikistan and the rest of the region have been having to cope with the fall from a collapse in oil prices and a recession in Russia.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Gas tariff rise in Kazakhstan

JULY 26 2016 (The Conway Bulletin) — The Kazakh anti-monopoly agency approved a 39% increase in the top rate it can charge for pumping gas through its pipeline network to 1,769 tenge/1,000 cubic metres ($5), in a move that will impact domestic and industrial gas prices. The new tariff ceiling will come into effect on Sept. 1 and will be valid until 2020. Gas price rises are a sensitive issue. Governments across the region have been raising prices slowly, moving away from Soviet subsidies. This, though, has frustrated people and triggered anti government protests.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Poverty increases in Kazakhstan

JULY 22 2016 (The Conway Bulletin) — In a new country report, the World Bank said that Kazakhstan has been unable to reduce poverty in the past few years, as the percentage of the population living off under $5/day continues to measure around 14%. In absolute numbers, poverty has increased and the number of people living under the World Bank threshold is nearing 3m. The World Bank said that the depreciation of the tenge since August 2015 and a stagnant job market have impacted living standards.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Oil output falls in Kazakhstan

JULY 28 2016 (The Conway Bulletin) — Due to sustained low oil prices, Kazakhstan’s oil production could shrink further this year, according to Asset Magauov, deputy energy minister. Mr Magauov said that a majority of the companies operating in the country reported a decline in production in 2015. The official forecast for 2016 is 75.5m tonnes, a 5% reduction compared to last year. In March, then-energy minister Vladimir Shkolnik had projected a production target of 77m tonnes for 2016.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Kazakh tenge slides to five-month low

ALMATY, JULY 28 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank said it will not intervene to prop up the tenge currency after it lost 3.5% of its value over the past week, hitting a five-month low of 354/$1 on Thursday.

This is the sharpest drop since February, the tail-end of a two year fall for the tenge during which it has lost half its value against the US dollar.

Even so, Adil Mukhamedzhanov, deputy director for monetary operations at the Central Bank, told Kazakh media that interventions would be light.

“Several factors impacted the exchange rate, chiefly low oil prices and worsening exchange rates of our trading partners,” he was quoted as saying.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Georgia’s Central Bank to cut interest rate

JULY 27 2016 (The Conway Bulletin) — Georgia’s Central Bank said on Wednesday it cut its key interest rate by a quarter of a percentage point to 6.75%. The decision is in line with the Bank’s policy of containing inflation while reducing the rate to within a 5% – 6% corridor in the short term. Since April, the Bank has cut interest rates three times from the previous level of 8%.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

IMF considers loan to Tajikistan

JULY 26 1 2016 (The Conway Bulletin) — Negotiations for a $500m IMF loan are continuing, Jamoliddin Nuraliyev, deputy chief of Tajikistan’s Central Bank told local media. The IMF has scheduled a visit to the country in August to lay out details for the loan. Mr Nuraliyev said that the country needs support to see it through a “difficult economic period.”

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Volatility to weaken the Kazakh tenge

AUG 1 2016 (The Conway Bulletin) — It has taken Kazakhstan a long time, but it could finally have reached its goal of having a free-floating currency.

The nightmare of last August when the tenge depreciated sharply against the US dollar after the Central Bank removed its currency peg, seems over.

That was the uncertainty of having a Central Bank chief, Kairat Kelimbetov, who didn’t show resolve and authority, and the uncertainty of living through a period of falling oil prices.

Gradually, since November 2015, when Daniyar Akishev was made the Central Bank chief, Kazakhstan has switched to a more hands-off policy, allowing the tenge to slide as the market demanded.

This new policy created another kind of uncertainty. The tenge will float freely, swept by oil prices and the performance of other currencies in the region.

This could mean that, with oil prices sliding back towards $40/barrel and the US Federal Reserve planning to raise interest rates, Kazakhstan could soon be facing an even weaker tenge.

The tenge depreciated by 5% this month, to 354/$1 and the outlook for the next few months is not promising. Analysts have said that this could be the beginning of a gradual slide that only much higher oil prices could reverse.

In an oil price scenario that has come to be known as ‘lower for longer’, a three-figure oil price, as it was in 2014, will remain unlikely for a while.

In addition, the Russian rouble seems to be limping behind the US dollar, which is causing a negative ripple effect on currencies across Central Asia and the South Caucasus. Kazakhstan’s membership of the Eurasian Economic Union bloc is, in this case, a determining factor for the tenge.

Domestically, too, with apparent terror attacks in western Kazakhstan and unprecedented violence on the streets of Almaty, the situation is not looking good. Insecurity has never been a foundation for currency stability.

And then, of course, there is the economic headache of negative growth, and falling oil production which will continue to undermine the tenge.

The tenge is unlikely to thrive in this contingency.

The ‘$1 stores’ that mushroomed across Kazakhstan towards the end of last year, selling items at the fixed price of 300 tenge, might now be forced to adjust their price, possibly on a daily basis, to reflect a worsening exchange rate.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Trade turnover rises in Armenia

JULY 19 2016 (The Conway Bulletin) — Armenia’s Statistics Committee said that trade turnover increased by 2.7% in H1 2016, compared to the same period last year, pushed up by a boost in exports. Exports grew by 16.7% to $815m, while imports decreased by 3.7% to $1.46b. A weak dram has made Armenian goods cheaper for exports.

ENDS

(News report from Issue No. 290, published on July 22 2016)