Tag Archives: interest rates

Armenia raises interest rate to highest level since Dec. 2016

YEREVAN/JUNE 15 2021 (The Bulletin) — Armenia’s Central Bank said that the economy had rebounded faster than expected from both losing a war against Azerbaijan and also from the coronavirus pandemic, giving PM Nikol Pashinyan a boost ahead of a tight election.

The Central Bank also raised interest rates by half a percentage point to 6.5%, its highest level since 2016, strengthening the Armenian dram against the US dollar.

“Gross demand is recovering faster than expected, mainly due to the rapid growth of global demand, increased remittances, the high growth rate of private consumption, while private investment activity remains weak,” the Central Bank said in its statement.

Armenians vote in a parliamentary election on June 20. Polls put Mr Pashinyan ahead of his main contender, former president Robert Kocharyan, but they have also suggested that he may not win a majority.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Uzbekistan keeps interest rates steady, says inflation is too high

MARCH 11 (The Bulletin) — Uzbekistan’s Central Bank declined to cut its key interest rate from 14% because it said that inflation was still too high. Inflation in Uzbekistan is currently at 11.4%, pushed up by rising domestic demand, an increase in global food prices and a rise in fuel prices. Uzbekistan’s interest rate has measured 14% since mid-2020.

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— This story was published in issue 475 of the Central Asia & South Caucasus Bulletin, on March 15 2021

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Kyrgyzstan increases interest rate by 0.5%

FEB. 24 2021 (The Bulletin) — Kyrgyzstan’s Central Bank increased its key interest rate by half a percentage point to 5.5% to counter rising inflation, its first rise since February 2020. The coronavirus pandemic and a coup in October has pressured the Kyrgyz som which is trading at around 84/$1, a fall of around 20%. This fall in the value of the som has pushed up inflation.

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— This story was published in issue 474 of the Central Asia & South Caucasus Bulletin, on March 5 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Armenian Central Bank raises interest rate to support currency

FEB. 2/3 2021 (The Bulletin) — Armenia’s Central Bank raised its key interest rate to 5.5% from 5.25% to strengthen its currency, the dram, which has dropped 6% since it lost a war against Azerbaijan for control of Nagorno-Karabakh last year. In neighbouring Georgia, the Central Bank there kept its key interest rate steady at 8% because it said that inflation had stalled because of the pandemic. 

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— This story was first published in issue 471 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Azerbaijan cuts interest rates

JULY 30 (The Bulletin) — Azerbaijan’s Central Bank cut its core interest rate by a quarter of a percentage point to 6.75%, its lowest rate for more than four years, to try to stimulate lending and its economy. Like the rest of the region, analysts have said that the coronavirus pandemic may tip Azerbaijan’s economy into a recession, although it is protected by cash earned from oil and gas sales.

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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.

— Copyright the Central Asia & South Caucasus Bulletin 2020

Armenia and Uzbekistan keeps interest rates steady

JULY 23/28 (The Bulletin) — The Central Banks of Armenia and Uzbekistan kept their interest rates unchanged, despite pressure to cut the cost of borrowing to help businesses fight an expected recession linked to the coronavirus pandemic. Armenia’s Central Bank said that despite deflationary pressures, its consumer price index still measured a 1.7% rise in prices over the past 12 months. 

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— This story was published in issue 455 of the Central Asia & South Caucasus Bulletin, on July 31 2020.

— Copyright the Central Asia & South Caucasus Bulletin 2020

Azerbaijan cuts interest rates

JUNE 19 (The Bulletin) — Azerbaijan’s Central Bank cut its core interest rate to 7% from 7.25% because of a drop in inflationary pressure. Like the rest of the region, Azerbaijan’s economy is expected to contract this year because of the impact of a lockdown designed to suppress the spread of the coronavirus.

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— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin, published on June 23 2020

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakhstan cuts its interest rate to help business deal with the coronavirus

APRIL 3 (The Bulletin) — Having increased its key interest rate to 12% from 9.5% last month to try to prop up its ailing currency against the dual impact of a collapse in oil prices and the spread of the coronavirus, Kazakhstan’s  Central Bank slashed it back down to 9.5%.

It said that the interest rate cut was needed to help businesses emerge intact from the economic fallout of the coronavirus pandemic. 

Kazakhstan has also been one of the first countries in the region to admit that its economy may contract after the shock of the pandemic.

Kazakhstan’s deputy finance minister Berik Sholpankulov said that the government would borrow $3b on foreign capital markets to fund economic recovery projects which include a massive state-sponsored construction spree that will employ thousands of people.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

IMF agrees to give Kyrgyzstan a loan of $120m to deal with the coronavirus

MARCH 27 (The Bulletin) — The IMF responded to Kyrgyzstan’s pleas for aid by agreeing a loan of $120m to help its economy survive the impact of the coronavirus pandemic. Kyrgyz Pres. Sooronbai Jeenbekov said in an open letter to the IMF that without a loan, the country would struggle to recover from the economic hit. 

The Kyrgyz som lost 16% of its value against the US dollar highlighting the economic impact that the country was already taking.

The Central Bank had been expected to increase its key interest rate to try to dampen anticipated rising inflation but instead it decided to keep rates at 5% (March 31).

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakhstan raises interest rates to protect currency against the coronavirus

MARCH 26 (The Bulletin) — Faced with a collapse in the value of its tenge currency, the Kazakh Central Bank raised interest rates by 2.75 percentage points to 12% on March 9. It confirmed on March 16 that it was going to maintain this rate. 

On March 24, Kazakhstan also banned the export of all foodstuffs. Officials said that food was needed in Kazakhstan for now and that it could not afford to be exported. The government has also cut its economic outlook for 2020 partly, it needs to be stressed, because of the collapse of oil prices.

On March 17, the government also announced a series of tax cuts and cheap credit initiatives which it said would help business recover from the shock of the coronavirus. Retailers, restaurants, cinemas and other business forced to close because of lockdowns linked to curtailing the spread of the coronavirus will be exempt from property tax for a year. Banks have been told to defer loan repayments and the government will spend $750 million on infrastructure projects which will create 120,000 jobs.

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— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020