Tag Archives: Kyrgyzstan

Currencies: Kyrgyzstan’s som, Kazakhstan’s tenge

NOV. 13 2015 (The Conway Bulletin) — The Kyrgyz Central Bank intervened in the currency market, selling around $14m on Friday to halt the fall of the som. It still fell 3% over the week finishing at 72.1/$1.

In Kazakhstan, the tenge was stable at 307/$1, although it reached a record low of 312/$1 on Monday.

The Georgian lari was stable at 240/$1 throughout the week.

In Armenia and Uzbekistan, currencies fell faster than previously. The Armenian dram lost 1% to 480.9/$1 and the Uzbek sum fell by 0.5% to just above 2,700/$1 on the official market. On the Black Market, the US dollar is reportedly selling at 6,200sum.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Foreign currency bank deposits increase in Kyrgyzstan

NOV. 10 2015 (The Conway Bulletin) – The amount of cash in Kyrgyzstan’s banking system held in foreign currencies jumped by 6.7% to nearly 65% between January and August, the Central Bank said according to Kyrgyz media reports.

This is a steep rise and highlights a lack of confidence in Kyrgyzstan’s som. It has lost around 26% of its value against the US dollar this year despite repeated interventions by the Central Bank to prop it up.

Inflation has also increased, although this has slowed over the past couple of months, pressuring people’s savings.

Interest rates are at a 10%, lower than they were at the start of the year but higher than at any time since 2012.

Like its neighbours, Kyrgyzstan has been struggling to deal with the fallout from a deepening economic malaise which has hit the region. One of its biggest problems has been a sharp drop in remittances sent back to Kyrgyzstan from workers in Russia.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Kyrgyz President wants change

NOV. 6 2015 (The Conway Bulletin) – Two years before he steps down as Kyrgyzstan’s president, Almazbek Atambayev, said he wants the country to fully embrace the parliamentary model of governance. Analysts interpreted this as an attempt to shore up power for his Social Democratic party.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Kyrgyzstan ditches energy ministry

NOV. 6 2015 (The Conway Bulletin) – Kyrgyzstan disbanded its energy ministry and reinvented it as a holding company under the ministry of environment. It will hold all the government’s stakes in its various energy projects. The reasons for the transformation have not been made clear.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Beeline profit rise in Kyrgyzstan

NOV. 11 2015 (The Conway Bulletin) — Beeline Kyrgyzstan, owned by Russia’s VimpelCom, posted Q3 profits up nearly 19% from Q2. Beeline said profit had risen because Kyrgyz were more relaxed about spending more on their mobile phones. Compared to last year, Beeline’s customer base was up only 1.7%. Analysts and businesses have said that in Kyrgyzstan, people are spending more and more time on their mobile phone surfing the web.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Business comment: A dangerous ripple effect

NOV. 13 2015 (The Conway Bulletin) — The whole post-Soviet region has faced a steep economic downturn over the past year, leading to regional trade imbalances that have travelled across borders.

Initially, the fall in the value of the Russian rouble hit the Kazakh tenge. Despite a 20% devaluation in Feb. 2014, the tenge’s peg to the US dollar made it increasingly expensive against the rouble. When the rouble started to lose double- digit value against the US dollar, the tenge held its US dollar trading point, making it increasingly expensive. For the first eight months of this year, cheap Russia goods flooded Kazakhstan.

Eventually, in August, the Kazakh Central Bank effectively ordered another devaluation by ditching a US dollar peg. The graph below illustrates this clearly. It shows the rouble/$1 rate and the rouble/tenge rate matching each other until August. The value of the rouble, according to the graph, halves against the US dollar and the tenge.

In August, though, there is a sharp correction in the trading rate of the rouble/tenge. It diverges, violently almost, with the rouble/$1rate. The graph shows that the tenge is still stronger than the rouble compared to June 2014, but the differential is reduced.

And this is where the ripple effect carried through to neighbouring Kyrgyzstan.

Thee blue line on the graph represents the rouble/som rate. It, broadly, matches the peaks and troughs of the rouble/$1 rate, suggesting an informal peg to the US dollar.

The Kyrgyz Central Bank, though, has clearly tried to devalue the som independently too, as the rouble/som rate diverges slightly from the rouble/$1 rate.

The yellow line shows the tenge/som rate, and clearly depicts the change in relative values of the two neighbours’ currencies. The som has been weaker against the tenge for most of the year, as shown by the fairly shallow but pronounced trough. This changes after the tenge devaluation in August.

A currency domino effect, although slower than analysts had predicted, is rippling through Central Asia. The rouble is an optimal benchmark to observe this phenomenon.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Kyrgyz-Tajik border row lingers

NOV. 6 2015 (The Conway Bulletin) – A land transfer deal between Kyrgyzstan and Tajikistan which was supposed to solve the neighbour’s long-running border dispute has been postponed, media reported. The row has flared into violence over the past couple of years and could even destabilise the region.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Central Asia’s largest botanicals garden in Kyrgyzstan withers

NOV. 6 2015, BISHKEK (The Conway Bulletin)– Famed across the Soviet Union as the biggest and most beautiful of Central Asia’s formal gardens, the Botanical Garden in Bishkek is now, quite literally, dying.

Once a peaceful sanctuary of bright exotic flowers and their perfumed scents, the 152 hectare Botanical Garden is overgrown and decrepit.

There are few visitors and even fewer staff. Most left in the 1990s when the Soviet Union collapsed, dragging down people’s salaries too. Now just a handful of under-paid scientists tend to the garden.

A weather-beaten Dmitry Vetoshkin, was one of these.

“For such a small city as Bishkek having a Botanical Garden is a luxury,” he said. But it’s a luxury that is under increased threat.

Kyrgyzstan’s capital is growing and has swallowed up the Botanical Garden. It once lay on the southeast fringe

of the city. Now, it is ringed by busy road and houses. Property developers are pinching parcels of land to build houses and gardens.

But for most people, the political elite included, the fate of the Botanical Garden is of little concern. “While political parties promise to improve people’s lives during current election campaign, none of them

announced a course to take up and renovate our natural heritage, our Botanical Garden, that stands at the entrance of the city,” said Vetoshkin.

Kyrgyzstan held a parliamentary election on Oct. 4.

There has though, despite the lack of support from the political elite, been some sort of grassroots resistance against selling off or giving away the Botanical Garden to developers. Vetoshkin said citizen power helped to defeat a proposal from developers to build new greenhouses in exchange for taking a large slice of the garden to develop.

Even so, the reprieve may just be temporary. It’s difficult to see just where the Botanical Garden fits into modern Bishkek life.

ENDS

(News report from Issue No. 255, published on Nov. 6 2015)

Australia holds talks with Kyrgyzstan

OCT. 31 2015 (The Conway Bulletin) – A newspaper in Australia reported that the government was in talks with the Kyrgyz authorities to resettle refugees and asylum seekers in Kyrgyzstan. Under a hardline policy, Australia refuses entry to all migrants and refugees. Neither the Australian nor the Kyrgyz government have commented.

ENDS

(News report from Issue No. 255, published on Nov. 6 2015)

Modernisation of power station starts in Kyrgyz capital

NOV. 2 2015 (The Conway Bulletin) – Kyrgyz PM Temir Sariyev inaugurated the second phase of a modernisation programme for the country’s biggest power plant outside Bishkek, a project considered vital for boosting the country’s decrepit power-generating infrastructure.

China agreed to fund the power plant upgrade, that will double capacity back to Soviet-era levels, in 2013 with a $386m loan from its Import-Export Bank. It handed the contract to strip out old Soviet-era kit and replace them with two new power producing units to China TBEA, a private company.

And Mr Sariyev was quick to praise China for its help in overhauling Kyrgyzstan’s power sector.

“I want to note the successful cooperation with China on the implementation of energy projects in the country and to express gratitude for the contribution to the economy of Kyrgyzstan,” he said according to media.

Earlier this year Kyrgyzstan opened a new power line that will transmit electricity from hyrdo- electric stations in the south of the country to its main population centres in the north without having to cross over Uzbek territory, as it had previously.

China has been investing heavily in infrastructure across Central Asia. It views this strategy as important for winning political influence.

Bishkek’s population is growing but its infrastructure has not been upgraded.

ENDS

(News report from Issue No. 255, published on Nov. 6 2015)