Tag Archives: economy

Kyrgyzstan troubles with EEU

NOV. 19 2015 (The Conway Bulletin) – There are still hundreds of teething problems that Kyrgyzstan has to overcome to successfully complete its integration into the Kremlin-lead Eurasian Economic Union (EEU), the country’s representative on the EEU’s board, Danil Ibraev, told media. Kyrgyzstan joined the group, which also includes Belarus, Kazakhstan and Armenia, in August. Kyrgyz business owners have complained about bureaucracy.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Currencies: Kyrgyzstan’s som, Kazakhstan’s tenge

NOV. 13 2015 (The Conway Bulletin) — The Kyrgyz Central Bank intervened in the currency market, selling around $14m on Friday to halt the fall of the som. It still fell 3% over the week finishing at 72.1/$1.

In Kazakhstan, the tenge was stable at 307/$1, although it reached a record low of 312/$1 on Monday.

The Georgian lari was stable at 240/$1 throughout the week.

In Armenia and Uzbekistan, currencies fell faster than previously. The Armenian dram lost 1% to 480.9/$1 and the Uzbek sum fell by 0.5% to just above 2,700/$1 on the official market. On the Black Market, the US dollar is reportedly selling at 6,200sum.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Foreign currency bank deposits increase in Kyrgyzstan

NOV. 10 2015 (The Conway Bulletin) – The amount of cash in Kyrgyzstan’s banking system held in foreign currencies jumped by 6.7% to nearly 65% between January and August, the Central Bank said according to Kyrgyz media reports.

This is a steep rise and highlights a lack of confidence in Kyrgyzstan’s som. It has lost around 26% of its value against the US dollar this year despite repeated interventions by the Central Bank to prop it up.

Inflation has also increased, although this has slowed over the past couple of months, pressuring people’s savings.

Interest rates are at a 10%, lower than they were at the start of the year but higher than at any time since 2012.

Like its neighbours, Kyrgyzstan has been struggling to deal with the fallout from a deepening economic malaise which has hit the region. One of its biggest problems has been a sharp drop in remittances sent back to Kyrgyzstan from workers in Russia.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Armenia cuts interest rates to counter low prices

NOV. 10 2015 (The Conway Bulletin) – Armenia’s Central Bank lowered its key interest rate by half a percentage point to 9.75%, its lowest level since January, because of slowing inflation.

The interest rate move highlights the delicate balance that Central Banks across Central Asia and the South Caucasus are having to strike between defending their currencies and stimulating growth to navigate through a deepening economic crisis.

The Central Bank said a drop in commodities prices and slowing global demand had dented price growth.

It said that inflation last month measured 0.4%, compared to 1% in October 2014. Overall annualised inflation measured 1.9% for the 12 months to the end of October.

“The board estimates that this trend will continue in the coming months and will have a deflationary impact on domestic prices,” the Central Bank said of weakening global commodities prices.

Armenia’ currency, the dram, has dropped by 15% this year against the US dollar. Its interest rates had risen to 10.5% in February but prices in Armenia have slowed, dragging down overall inflation.

The biggest problem for Armenia, like most of its neighbours in the South Caucasus is the recession in Russia.

This has hit vital remittance flows and also savaged is key export market. The Armenian dram is now overvalued against the Russian rouble and demand inside Russia has also dropped, hitting overall export potential.

This month, as the Bulletin reports in this week’s Business News, the country’s biggest fish farm business declared itself bankrupt. Its biggest market had been Russia and this market had disappeared.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Kazakh Team Astana receives cycling licence

NOV. 9 2015 (The Conway Bulletin) – After a four-month-long review linked to a drug doping scandal, Astana Pro cycling team received its World Tour licence. Astana Pro, which is funded by the Kazakh sovereign wealth fund Samruk-Kazyna and races in the national colours, has been involved in several doping cases since it was set up in 2007.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Georgia tweaks budget to boost health

NOV. 9 2015 (The Conway Bulletin) – Georgia’s government wants to tweak the national budget for a second time this year to increase funding for one of its key policies — creating an improved universal health care system.

Finance minister Nodar Khaduri said that increased revenue from tax and a reduction in the regional aid budget would pay for the increase in health care spending.

Earlier this year, the ruling Georgian Dream government submitted a budget which included a drop in revenue raised by taxes, a fall it linked to a regional economic downturn. That thinking has now changed.

The universal healthcare that the Georgian government wants to build is one of their headline policies. It will now absorb around 16% of the health ministry’s total budget.

“It is a successful program and many people apply to use it,” media quoted Mr Khaduri as saying. “So it became necessary to add funds to this program.”

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Kazakhstan cuts food subsidies

NOV. 10 2015 (The Conway Bulletin) – In what it described as a push to promote competition, the Kazakh government said it will cut subsidies for bread, petrol, and animal husbandry. In particular, the government will cut subsidies for wheat producers from 2,500 tenge/tonne ($8) to zero. The government may be looking to save money.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Armania increases electricity exports

NOV. 9 2015 (The Conway Bulletin) – Armenia wants to increase exports of electricity, natural resources minister, Levon Shahverdyan, said, more evidence that it wants to become a region energy exporter. Iran and Georgia are both dealing with power shortages.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Kazakhstan wracks up $4b deficit in 2015

NOV. 11 2015 (The Conway Bulletin) – Kazakhstan wracked up a $4b current account deficit in the first nine months of 2015, the Central Bank said, a direct consequence of the fall in the price of oil and gas — its main exports.

This deficit compares with a $6b surplus in the same period last year and shows the impact of the collapse in energy and commodities prices.

The volume of Kazakhstan’s oil and commodities exports was the same in the first nine months of this year compared to last year but they dropped, heavily, in value, earning Kazakhstan far less cash.

The Central Bank data will intensify pressure on the Kazakh government to diversify its economy away from oil and gas.

And Kazakhstan’s monetary policy also played a role in current account deficit too.

Until the Central Bank abandoned its US dollar peg in August, after stubbornly refusing to devalue alongside the Russian rouble, Kazakh exports to Russia were just too expensive. And this hurt Kazakh industry. Russia is one of its main export market.

And this showed up in Kazakhstan’s trade balance. Although still positive, it shrank by almost two thirds. In Jan-Sept 2015, Kazakhstan’s exports exceeded imports by $10.7b, a drop from $30.6b during the same period in 2014.

These figures are a stark reminder of the impact of the regional economic malaise on Kazakhstan. The 40% devaluation of the tenge after the Central Bank ditched its US dollar peg will help Kazakh exporters but the government really needs an increase in oil and gas prices to restore its revenues.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Uzbek sum drops

NOV. 9 2015 (The Conway Bulletin) – Uzbekistan’s Central Bank dropped the value of its sum currency to 2,706 sum/$1, down from 2,635/$1, a drop of 2.6%. On the Black Market, the dollaruz.com website reported that the fall was even greater. Currencies across Central Asia are under increasing pressure from a fall in the value of commodities and a recession in Russia.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)