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
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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
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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
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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
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FEB. 24 2020 (The Bulletin) — Kyrgyzstan’s Central Bank raised its key interest rate by 75 basis points to 5% because of creeping inflationary pressures. This is its highest rate since mid-2018 when the Central Bank started cutting its interest rate. It said in a statement that it had raised its inflation prediction for 2020 to 5% from an earlier estimate of 4.6%. Food price rises are driving inflation, it said.
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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin
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DEC. 13 2019 (The Bulletin) — Azerbaijan’s Central Bank revised down its inflation estimate for this year to 2.8% – 3% from an earlier prediction of 4% and cut its key interest rate to 7.5% from 7.75%. Azerbaijan’s Central Bank has been steadily cutting its key interest rate since the start of 2018 when it measured 15%. It devalued its currency by 50% in 2015 when global oil prices collapsed.
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— This story was first published in issue 432 of the weekly Bulletin on Dec. 27 2019
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DEC. 12 2019 (The Bulletin) — Georgia’s Central Bank increased its key interest rate by 50 basis points to 9%, its highest level for at least 10 years. This year, the Georgian Central Bank has increased its interest rate from 6.5% in an effort to dampen inflation which it partly blames on its weak currency. It said that inflation now measured 7% and would not fall until March 2020. >> See page 8
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— This story was first published in issue 432 of the weekly Bulletin on Dec. 27 2019
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DEC. 9 (The Bulletin) — Kazakhstan’s Central Bank kept interest rates at 9.25% and warned that inflationary pressure was building. It said that the weak tenge, which is bumping along at all-time lows, and a growing current account deficit was an inflation risk. Inflation is currently at around 5.5% but is expected to rise to 6% next year. >>See page 8 for more
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— This story was first published in issue 431 of the weekly Bulletin on Dec. 9 2019
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NOV. 26 (The Bulletin) — Uzbek Central Bank chief Mamarizo Nurmuratov said that he may start cutting interest rates from next year as it focuses its attention on trying to beat inflation. Uzbekistan last changed its key interest rate in 2018 when it moved it to 16% from 14%. This month the Central Bank has been handed more power and told to focus on dampening inflation which it expects to hit 13% next year.
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— This story was first published in issue 430 of the weekly Bulletin.
JAN. 28/30 (The Conway Bulletin) — Kazakhstan and Uzbekistan’s Central Banks kept their interest rates steady because of low inflation. Falling prices have been a feature of the economies of the region since they recovered from an economic downturn in 2014-17. Kazakhstan’s interest rate is currently 9.25% and Uzbekistan’s lies at 16%.
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>This story was first published in issue 398 of The Conway Bulletin on Jan. 31 2019
Copyright The Conway Bulletin 2019