SEPT. 3 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank said that it was introducing a new key interest rate that would be its main tool for manipulating monetary policy. It set the new refinancing rate at 12%.
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(News report from Issue No. 246, published on Sept. 4 2015)
JULY 28 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank cut its main interest rate to 8% from 9.5% because of a slowdown in inflation. The Central Bank said annualised inflation was now hovering around 6%, nearly half the level seen at the beginning of the year. Kyrgyzstan, like the rest of the region, has been coping with the fall out of a decline in the Russian economy.
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(News report from Issue No. 242, published on August 7 2015)
JULY 10 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank cut its key interest rate by 50 basis points to 3% to give its non-oil sector a boost.
Like other countries in the region, Azerbaijan has been trying to cope with an economic downturn triggered by a fall in Russia’s economy and a drop in the price of oil.
The Central Bank said Azerbaijan’s economy had stabilised since it devalued its manat currency by a third in February.
“The Azerbaijani economy remains resilient amid recent processes in the global economy and in the region continuing its stable growth,” the Azerbaijani Central Bank said in a statement.
“The monetary policy can be further eased given the acceptable level of inflation and dynamics of money supply.”
The cut in interest rates, though, is likely to put more pressure on the manat currency. This was momentarily relieved by the devaluation. Since then, data from the Central Bank has shown it has continued to spend heavily propping up its currency, although there was a rebound over the past few months which may have prompted the interest rate cut. Azerbaijan’s foreign currency reserves now measure $8.5b compared to 13.7b at the end of 2014.
Azerbaijan’s economy is skewed towards oil and gas.
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(News report from Issue No. 240, published on July 16 2015)
JULY 1 2015 (The Conway Bulletin) – Georgia’s Central Bank raised its interest rate to 5.5%, its highest since Nov. 2012, to combat accelerating inflation. Georgia’s Lari currency has fallen sharply in value over the past few months, mainly because of the downturn in Russia’s economy.
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(News report from Issue No. 238, published on July 2 2015)
JUNE 30 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank kept its interest rates steady at 9.5%, despite inflation falling. The Central Bank is trying to weigh up protecting its som currency from devaluing and also stopping inflation dropping too low. Inflation dropped to 4.8%, down by half since the beginning of the year.
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(News report from Issue No. 238, published on July 2 2015)
JUNE 23 2015 (The Conway Bulletin) – Armenia’s Central Bank kept its key interest rate unchanged at 10.5% as inflation steadied. The Central Bank increased its interest rate to 10.5% in February as it tried to defend the value of its currency.
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(News report from Issue No. 237, published on June 25 2015)
MAY 26 2015 (The Conway Bulletin) – The Kyrgyz Central Bank cut its interest rate to 9.5% from 11%, the first cut since 2013, because of a slowdown in consumer price inflation.
It did warn, though, that despite a slight economic improvement, the country faced uncertain times.
“There has been economy a slowdown in inflation. At the same time, economic growth continues to be influenced by external factors,” it said in a statement on its website.
“The economic situation in the country’s main trading partners is uncertain and continues to impact the slowing economic growth of our own country through foreign trade and remittances.”
Kyrgyzstan, like the rest of the region, has been coping with a slowdown in Russia’s economy, triggered by a sharp fall in oil prices. Remittances from Kyrgyz working in Russia is a major part of Kyrgyzstan’s economy. This has dented the value of the Kyrgyz som and accelerated inflation.
Overall, the Central Bank said that inflation had slowed to 6.4% in April, down from 10.5% at the end of 2014.
The Central Bank also said that GDP growth for January to April had measured 7% because of an increase in production at Kumtor, a gold mine. Without Kumtor’s contribution, GDP growth would have measured 4.2%.
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(News report from Issue No. 233, published on May 28 2015)
MAY 19 2015 (The Conway Bulletin) – The IMF weighed into the debate surrounding the tenge when it said the Kazakh Central Bank had enough cash to defend the currency against a sudden devaluation. The Central Bank has been under increased pressure to follow neighbours and devalue its currency.
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(News report from Issue No. 232, published on May 20 2015)
MAY 12 2015 (The Conway Bulletin) – The National Statistics Committee of Kyrgyzstan said foreign direct investment (FDI) fell by 37% in the first four months of 2015, figures which highlight the current difficult economic climate.
This marks the second year of decreasing FDI in Kyrgyzstan after a jump in 2013. Most of the loss this year can be attributed to the construction sector, impacted by economic sanctions and crisis in Russia, and to the mining sector, due to the Kumtor gold mine stalemate.
Alex Nice, Central Asia analyst at the Economist Intelligence Unit, said: “Economic and political uncertainty may have depressed foreign investment and of course relatively weak gold prices may also depress new investment in Kumtor, the biggest source of FDI.”
With the fall in remittances from migrant workers abroad and low GDP growth for the next couple of years, Kyrgyzstan needs to improve its business climate in order to attract more, rather than less foreign investors interest.
But as the head of the Association for Foreign Investment, Kairat Itibayev, told media, infrastructure in Kyrgyzstan needs improving.
“Businessmen from Turkey, for example, lament that there is a lack of storage space, unstable electricity, and unusable roads,” he said.
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(News report from Issue No. 231, published on May 13 2015)
APRIL 29 2015 (The Conway Bulletin) – Uzbekistan’s Central Bank said it would keep its key interest rate at 9% because the economy was set to hit its inflation target. In January the Central Bank raised its interest rate by 1%. Uzbekistan’s main currency exchange exists on the black market but the statement gives insight into the Central Bank.
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(News report from Issue No. 230, published on May 6 2015)