Tag Archives: economy

Georgian PM and CBank meet despite row

SEPT. 22 2015, TBILISI (The Conway Bulletin) — Pushing their personal differences aside, Georgia’s Central Bank chief Giorgi Kadagidze and the PM Irakli Garibashvili held a rare head-to-head meeting to discuss the increasingly poor state of the Georgian economy.

A collapse in global energy prices and a sharp fall in the performance of Russia have pressured regional economies this year but a breakdown in relations between the Central Bank and the PM’s office has also been a feature of the year in Georgia.

The Central Bank’s press office declined to confirm if this was the first time Mr Garibashvili, the PM, had visited Mr Kadagidze in 2015 but analysts said it was a rare occasion.

“It was significant, as they discussed the currency,” said Tamar Jugheli, research director at the Policy and Management Consulting Research Center. She said a management change in one of the main departments at the Central Bank had improved relations. Mr Garibashvili has criticised Mr Kadagidze over monetary policy. He also stripped the Central Bank of its power to oversee commercial banks.

Like many issues in Georgia, politics is at the heart. Mr Kadagidze was appointed by the previous government of former president Mikheil Saakashvili, irritating the current government.

Still with Georgia’s currency dropping to an all-time low and with inflation rising fast, Mr Kadagidze and Mr Garibashvili had to act. After the meeting the Bank bought $40m worth of lari and then, the following day, it increased interest rates.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Currency: Kazakh tenge, Kyrgyz som

SEPT. 18 2015 (The Conway Bulletin) — Have the Kazakh tenge and the Kyrgyz som reached rock bottom yet? This week, the tenge in Kazakhstan suffered another strong fall (-4.4%). The cost of $1 even rose above the psychological rate of 300 tenge on Sept. 16, only to settle back down to around 270 by the end of the week.

The Kyrgyz som also hit a historical high of 70/$1 on Wednesday.

And this despite repeated interventions from both Central Banks, which bought hundreds of millions of dollars in the currency market to support the tenge and som.

At the end of last week, the announcement that Dariga Nazarbayeva, the eldest daughter of Kazakh president Nursultan Nazarbayev, had been appointed as deputy PM sparked a late round of trade in the dollar market, weakening the tenge. Was this the market saying that they were worried about her promotion? Some analysts said that President Nazarbayev may be grooming her to take over the top job.

The som is struggling because the Russian economy isn’t recovering and the upcoming parliamentary elections in Kyrgyzstan are upset- ting the market.

In Georgia, the lari lost 2.4%, probably linked to general Emerging Markets weakness.

The Fed hasn’t ruled out the possibility of increasing rates by the end of the year. Such a decision would divert US dollars back to the US economy, away from Emerging Markets. The faltering economies in Central Asia and the South Caucasus need to prepare themselves for the worst.

Tightly-managed currencies in Azerbaijan, Tajikistan, Turkmenistan and Uzbekistan remained vir- tually unchanged this week. To maintain the exchange rates constant, central bankers in these countries had to heavily intervene in the currency markets.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kazakhstan to subsidise industries

SEPT. 15 2015 (The Conway Bulletin) – The Kazakh government said it would subsidise industrial companies that needed to increase salaries to match rising inflation and the falling value of the tenge. The Kazakh government has struggled to manage the economy during difficult economic times.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Cheese exports double in Armenia

SEPT. 14 2015 (The Conway Bulletin) – Russia has doubled cheese imports from Armenia this year, media quoted the head of Russia’s statistics agency, Konstantin Laikam, as saying. Shops in Moscow and elsewhere in Russia have had to diversify their supplier base for cheese and other products to beat EU sanctions.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kyrgyz som slips to new low

SEPT. 16 2015, BISHKEK (The Conway Bulletin) — Kyrgyzstan’s som dropped to its lowest level against the US dollar since independence, forcing the Central Bank to step in to brake its fall.

At exchange kiosks in Bishkek, the som traded at 72/$1 before recovering to around 69/$1 after the Central Bank’s intervention. Still, the fall in the som, now down 13% in the past month, has pushed up inflation and worried people.

“Food is getting more expensive, it definitely reflects on the family budget,” a 52-year-old man who declined to be named said as he left a supermarket in central Bishkek.

When the Kyrgyz government pushed the country into the Russia- led Eurasian Economic Union last month it said food prices would fall.

Emil Umetaliev, a Bishkek-based analyst, said this promise has been shown to be empty. “How can they be cheaper if in Russia they are getting more expensive because of an internal crisis?” he said.

To stop the slide, the Central Bank bought $18m worth of som but a source at the Bank told the Bulletin officials were anxious.

“The Bank made intervention but it did not particularly affect such a fast growth of dollar,” she said.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

US says graft is a problem in Armenia

SEPT. 17 2015 (The Conway Bulletin) – In an interview with Radio Free Europe/Radio Liberty, the US Ambassador to Armenia, Richard Mills, said that corruption was still a major problem in the country. Mr Mills said that some progress had been made but that it was holding back the Armenian economy.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

IMF raises Uzbek GDP growth

SEPT. 16 2015 (The Conway Bulletin) – The IMF increased its GDP growth forecast for Uzbekistan to 6.8% from an earlier estimate of 6.2% although it also raised its inflation forecast to over 10%. The increase in inflation will all but cancel out any real GDP growth increase in Uzbekistan this year.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

ADB boosts Kazakh SMEs

SEPT. 15 2015 (The Conway Bulletin) — Damu, a state-owned fund that helps SMEs in Kazakhstan, said it is negotiating on behalf of local businesses for a better interest rate on loans from the Asian Development Bank. The ADB has made $500m worth of loans available to SMEs in Kazakhstan since 2010. The Damu fund wants a $228m tranche made available to SMEs with an interest rate of 14% or below.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Inflation rises in Georgia

SEPT. 16 2015 (The Conway Bulletin) – Producer prices have risen by nearly 10% in the past year in Georgia, the country’s statistics office said. The main driver of the inflation was a sharp increase in prices of electricity, water and gas, rises all linked to the fall in the value of the Georgian lari.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kyrgyzstan should diversify assets

SEPT. 15 2015 (The Conway Bulletin) – Kyrgyz should diversify their assets, including cash, to protect themselves from the sharp swings in the value of currencies and commodities, Raushan Seitkazimova, head of the Central Bank’s monetary control unit, told media. The value of the Kyrgyz som has been fluctuating wildly, over the past few months.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)