Tag Archives: Kazakhstan

Kazakh government cuts flour subsidies

JAN. 6 2016, ALMATY (The Conway Bulletin) — Bread prices are beginning to rise in Kazakhstan after the government cut flour subsidies, people working in the bread-making sector told The Bulletin.

The Kazakh government ended its subsidies for flour on Jan. 1, a move it flagged up in November as part of an overhaul of government spending designed to counter an economic slowdown. It has defended dropping subsidies as fair because it means that
the money saved can be re-focused on benefits for poorer sections of society. Asylzhan Mamytbekov, minister for agriculture, has said that flour subsidies were costing the government 9b tenge a year ($26m).

But the impact of the subsidy cut on bread-makers is already being felt.

In Almaty, Yerbol Beisembayev was going about his business buying bread from factories and re-selling loaves to shops. He said that a couple of factories had already closed because the cut in flour subsidies had made them unprofitable.

“Now everything will depend on who will get the best price for the flour,” he said. “The government has allowed bread (prices) to free float, just like the tenge.”

In August, the Central Bank ditched the tenge’s peg to the US dollar. This sent the value of the tenge crashing by around 40%.

It appears that, for now, bread producers are preferring to soak up the extra cost of the flour rather than pass it on to consumers. Most shops selling bread in Almaty said there had been a small price rise of 5 tenge a loaf — roughly 8%. This below the doubling of prices that analysts had predicted once flour subsidies were cut.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Inflation accelerates in Kazakhstan

JAN 5 2016 (The Conway Bulletin) – Annualised inflation in Kazakhstan hit 13.6% for the 12-months to the end of December, its highest rate for six years, the National Statistics Committee said. Inflation shot up in October after the tenge depreciated. In September, annualised inflation in Kazakhstan measured just 4.4%.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

4G licences expand in Kazakhstan

DEC. 30 2016 (The Conway Bulletin) — The Kazakh government said it has allowed local telecom operators to provide 4G services to their customers . State-owned Kazakhtelecom’s subsidiary Altel had been the only company that could use the 4G network. Other companies may now offer 4G data services, giving a much-needed competitive boost to Kazakhstan’s telecoms sector.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Foreign currency savings rise in Kazakhstan

JAN 6 2016 (The Conway Bulletin) – The proportion of cash in banks in Kazakhstan held in foreign currencies rose to 77.5% in November from 76.4% a month earlier, media reported quoting the Central Bank, highlighting people’s lack of confidence in the national currency. It has been a long-held Central Bank policy to try to persuade people to keep their savings in tenge. The tenge, though, lost around half its value in 2015.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Central Asia Metals’ plant in Kazakhstan boosts production

JAN. 6 2016 (The Conway Bulletin) — London-listed Central Asia Metals said it achieved record high production levels at its copper plant in Kazakhstan, boosting its plans for 2016. Over 12,000 tonnes of copper were recovered in 2015, an 8.4% jump compared to 2014.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Kazakh President’s ex- son-in-law dies in prison

DEC. 23 2015 (The Conway Bulletin) – A judge in Austria ruled that Rakhat Aliyev hanged himself in a prison cell in Feb. 2015 shortly before he was due to appear in court charged with the murder of two bankers outside Almaty nearly 8 years earlier. Some people had suggested that Aliyev, previously a son- in-law and close confident of Kazakh president Nursultan Nazarbayev, had been murdered. The Kazakh authorities had wanted to extradite him.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

WBank cuts 2016 outlook for Kazakhstan

JAN. 7 2016 (The Conway Bulletin) – The World Bank cut its economic outlook for Kazakhstan in 2016 to 1.1% because of sustained low oil prices. It had earlier predicted growth of 1.9% in 2016, up from 0.9% in 2015. Kazakhstan has been hard hit by the sudden and sustained fall in the price of oil.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Currencies: US dollar, Kazakh tenge

JAN. 7 2016 (The Conway Bulletin) — The New Year did not change the fortunes of currencies in the South Caucasus and Central Asia. All currencies are still suffering against a strong US dollar and Central Banks are intervening to prop them up.

Undoubtedly, the most notable decision came just before the holidays when Azerbaijan ditched its currency peg to the dollar and let the manat slide. After a 48% fall, the currency found its equilibrium at 1.55/$1. It is now trading at 1.57/$1.

In Kazakhstan, the tenge recovered towards the end of December, but it slid to 345/$1 in January.

Tajikistan witnessed the worst start of the year, with its somoni currency falling 2.5% in the first week of January, trading at 7.17/$1. Notably, exchange points have been charging a premium of 8-10% on currency transactions in the past few weeks.

In Kyrgyzstan the Central Bank has kept the som stable at 75.9/$1 by intervening several times.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Kazakh President’s ally retires

DEC. 25 2015 (The Conway Bulletin) – Kazakh President Nursultan Nazarbayev’s ally Nurtai Abykayev retired as chairman of the National Security Committee, one of the most influential posts in the country. Mr Abykayev, 68, had been chairman of the National Security Committee since 2010, the second time he had held the position. Vladimir Zhumakhanov, previously his deputy, takes over as head.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Editorial: Currency controls in Kazakhstan and Azerbaijan

JAN. 8 2016 (The Conway Bulletin) – Both Kazakhstan and Azerbaijan ditched their currencies’ peg to the US dollar in 2015, triggering sudden and sustained depreciation of their currencies.

These were tough, but necessary calls by their Central Banks as these currencies were over-valued compared to oil and the Russian rouble.

What happens next differentiates Azerbaijan and Kazakhstan.

Kazakhstan has allowed, with the odd intervention, its currency to devalue. The Azerbaijani Central Bank, by contrast and very much in keeping with the tight way that the country is run, appears determined to anchor the manat more-or-less at its current rate against the US dollar. The rhetoric may be of liberalisation but the actions are of a conservative and uptight Central Bank.

And this comes across in other ways too. A couple of weeks after the devaluation, Azerbaijan imposed a rule that only people presenting their official ID could change more than $500 into foreign currencies. This could be the first of many exchange controls.

ENDS

(Editorial from Issue No. 262, published on Jan. 8 2016)