FEB. 3 2016 (The Conway Bulletin) – Tajikistan’s Central Bank ordered all remittances sent from Russia to be paid out in the local somoni currency. The Central Bank said the move was designed to support the somoni. It has lost around a third of its value over the past few months. Remittances to Tajikistan, vital to the economy, are down. Russia is the main source of remittances.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 1 2016 (The Conway Bulletin) – Kazakhstan’s Central Bank raised interest rates by 1 percentage point to 17%, its first monetary policy move for three months. The Kazakh tenge has been sliding in value and the Central Bank has at times appeared powerless to stop this. It has slowly increased interest rates but to limited effect.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 1 2016 (The Conway Bulletin) – Serikzhan Mambetalin, a Kazakh opposition activist, was freed from prison after issuing an apology for inciting ethnic hatred. Mambetalin and his colleague, Ermek Narymbayev, were jailed at the end of January. Mambetalin’s lawyer told RFE/RL that his appeal process was still ongoing. The Kazakh authorities have clamped down on the country’s beleaguered opposition as the economy has worsened.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 1 2016 (The Conway Bulletin) – Annualised food price inflation in Kazakhstan measured 11.6% for the 12-months to the end of January, the country’s statistics service said. The data highlights just how fast prices have risen in Kazakhstan. It devalued its currency last year, forcing up prices and salaries.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 266, published on Feb. 5 2016)
JAN. 29 2016 (The Conway Bulletin) – Ratings agency Standard & Poor’s downgraded Azerbaijan’s debt status to junk and said that its economy would contract for the first time in a decade. The downgrade from BBB- to BB+ comes off the back of a 35% collapse in the value of the Azerbaijani manat, growing internal dissatisfaction and concern over disappearing jobs. Azerbaijan is reliant on oil exports for revenues.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 266, published on Feb. 5 2016)
JAN. 29 2016 (The Conway Bulletin) – Emigration from Armenia shrunk its population below 3m for the first time since the 1970s, a psychologically-important threshold and a statistic that highlights a population outflow trend across Central Asia and the South Caucasus.
Armenia’s statistics agency said that the population fell in 2015 by 12,000 people to 2,998,600 people — the lowest level since 1977.
It’s also more evidence of a trend which has seen Armenia’s population shrink by 36,000 in the past five years and by 643,000 since 1991 when it became independent from the Soviet Union.
Armenia has large diaspora populations in France, Russia, the United States and across the Middle East. Most of the outflow is driven by people looking to join relatives in these countries and boost their job prospects.
One of the biggest problems for Armenian policymakers is that most of the people leaving Armenia are young and well-educated. This puts pressure on Armenia’s system with its aging population.
In 2013, the government ordered the State Statistics Committee to investigate the causes and results of this declining population.
There has been some inflow into Armenia over the past few years with ethnic Armenians who had previously lived in Aleppo, Syria, fleeing a civil war.
The Armenian government has accepted around 16,000 refugees from Syria.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 5 2016 (The Conway Bulletin) — In Kazakhstan, the Central Bank resumed its work as the country’s financial regulator after a three-month hiatus, increasing interest rates by 1 percentage point to 17%.
Daniyar Akishev, the Central Banker, is at the helm again, it seems. He even ordered a handful of interventions in the currency market in January, something he had ruled out since his appointment last November.
Now, Kazakhstan watchers expect monetary policy to become more stable and predictable in the coming months. The next policy meeting will be held in six weeks, one week before a parliamentary election on March 20.
Still, many don’t see Mr Akishev’s position as an independent one. He is a seasoned Central Bank employee, but it is clear that he is not as free as many Western Central Bankers are.
A recent symbolic move could corroborate this view. This week, Kazakhstan’s President Nursultan Nazarbayev signed a decree that makes the Central Banker’s signature on the back of banknotes redundant.
Only eagles, monuments and the President’s handprint will continue to feature in Kazakhstan’s colourful currency.
The Central Banker’s signature is a convention that most countries in the world adopt.
Kazakhstan will now join a handful of countries that don’t feature their Central Banker’s signature on banknotes. This group includes China, Japan and Uzbekistan.
This might be, essentially, a final step by the Kazakh government to strip the Central Bank of the independence it gained under former governor Grigory Marchenko who left in 2013.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 266, published on Feb. 5 2016)
JAN. 29 2016 (The Conway Bulletin) – Georgia’s GDP grew by 2.8% in 2015, down from 4.6% in 2014, the national statistics office said. This was around half predictions at the beginning of the year and was the lowest annual growth rate since 2009, when the Global Financial Crisis dented growth around the world. Georgia’s government has said that it expects growth of around 3% in 2016.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 266, published on Feb. 5 2016)
JAN. 27 2016, BAKU (The Conway Bulletin) — An IMF delegation flew to Baku for meetings with Azerbaijan’s government over a potential loan to buffer it against a financial storm that now threatens to seriously damage its economy.
The FT newspaper reported that the the loan could hit $4b, although an IMF statement later dodged giving specific numbers.
“An IMF team will be in Baku during Jan. 28 – Feb. 4 for a fact- finding staff visit at the authorities’ request. The team will discuss areas for technical assistance and assess possible financing needs,” it said in a statement.
Azerbaijan’s finance minister, Samir Sharifov, though, played down reports of a loan.
He instead said that Azerbaijan was going to raise $2b by selling debt for the Southern Caucasus Gas Corridor Company, which manages various pipelines, and pipeline projects, running from the Caspian Sea to Europe.
“There is no urgent need for a loan, but we can raise loans to support the economy amid low oil prices,” Mr Sharifov told journalists in Baku of talks with the IMF.
If Azerbaijan did take an IMF loan it would be the first emergency loan given to a sovereign state during this current financial downturn. Taking an IMF loan would also dent Azerbaijan’s pride. Fuelled by high oil prices its economy has boomed over the past 15 years. The government has invested heavily in promoting its reputation as a bridge between the East and West, building grandiose towers and sponsoring major sports events.
But the government has failed to shift Azerbaijan from a petro-econ- omy to a more dynamic economy with several income streams. Instead, Azerbaijan still receives around 95% of its export revenue from oil sales.
And with oil prices at around 12- year-lows this has begun to hurt.
The government has slashed spending, inflation is soaring and jobs are melting away. The manat currency has dropped a third in value in the past month and frustrated ordinary people are beginning to speak out and protest against the government.
A Conway Bulletin correspondent in Baku said people in the streets were increasingly referring to the current economic downturn as a “crisis”.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 265, published on Jan. 29 2016)
JAN. 27 2016 (The Conway Bulletin) — Azerbaijan’s Central Bank stripped six banks of their licences because they failed to meet newly imposed minimum capital requirements, a strong signal that the authorities want to weed out weaker banks to try to fend off a deepening financial crisis.
The six banks — Ganja Bank, Bank of Azerbaijan, United Credit Bank, NBC Bank, Caucasian Development Bank and Atrabank — all lost their licences in the past 10 days. This leaves just over 30 banks operating in Azerbaijan.
“Banks that don’t meet requirements and have major shortcomings can’t operate in Azerbaijan,” President Ilham Aliyev said in a televised statement, hinting at more closures.
In mid-2012, Azerbaijan’s Central Bank increased by five times the minimum capital requirements for commercial banks from 10m manat to 50m manat (then around $64m, now $31.3m). The deadline for all banks in the country to comply with the new requirements was first set for 2013 and then delayed to end-2015.
For banks, one way to avoid closure and improve financial health is to unite. AGBank and DemirBank signed a protocol to merge last week and Pasha Bank, Kapital Bank and Atabank are in talks to create a single lender, according to Bloomberg.
Last week, ratings agency Moody’s downgraded several of the biggest banks in Azerbaijan, a direct consequence of the negative impact of the manat depreciation. Three of Azerbaijan’s top-10 banks, Xalq Bank, Bank of Baku and Unibank, were among the lenders on Moody’s radar.
With the Azerbaijani manat falling by 35% since Dec. 21, this is a particularly tough time for Azerbaijan’s banking sector and for ordinary people. The IMF has also flown into Baku to potentially offer a loan.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 265, published on Jan. 29 2016)