Tag Archives: Kyrgyzstan

Currency: Kazakh tenge, Kyrgyz som

SEPT. 18 2015 (The Conway Bulletin) — Have the Kazakh tenge and the Kyrgyz som reached rock bottom yet? This week, the tenge in Kazakhstan suffered another strong fall (-4.4%). The cost of $1 even rose above the psychological rate of 300 tenge on Sept. 16, only to settle back down to around 270 by the end of the week.

The Kyrgyz som also hit a historical high of 70/$1 on Wednesday.

And this despite repeated interventions from both Central Banks, which bought hundreds of millions of dollars in the currency market to support the tenge and som.

At the end of last week, the announcement that Dariga Nazarbayeva, the eldest daughter of Kazakh president Nursultan Nazarbayev, had been appointed as deputy PM sparked a late round of trade in the dollar market, weakening the tenge. Was this the market saying that they were worried about her promotion? Some analysts said that President Nazarbayev may be grooming her to take over the top job.

The som is struggling because the Russian economy isn’t recovering and the upcoming parliamentary elections in Kyrgyzstan are upset- ting the market.

In Georgia, the lari lost 2.4%, probably linked to general Emerging Markets weakness.

The Fed hasn’t ruled out the possibility of increasing rates by the end of the year. Such a decision would divert US dollars back to the US economy, away from Emerging Markets. The faltering economies in Central Asia and the South Caucasus need to prepare themselves for the worst.

Tightly-managed currencies in Azerbaijan, Tajikistan, Turkmenistan and Uzbekistan remained vir- tually unchanged this week. To maintain the exchange rates constant, central bankers in these countries had to heavily intervene in the currency markets.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Stock market: Centerra Gold, KAZ Minerals

SEPT. 11-18 2015 (The Conway Bulletin) — Canadian mining company Centerra Gold saw its stock price on the Toronto Stock Exchange jump over 16% to 7.34 Canadian dollars, after having slumped in the past three weeks, due to the signing of a new exploration licence in British Columbia. Centerra’s main asset, the Kumtor gold mine, is located in Kyrgyzstan. London listed KAZ Minerals, was down 6% to 152 pence due to low copper prices. Kazakhstan-focused Roxi Petroleum gained 4.4% this week, to 8.75 pence.

Kcell, one of Kazakhstan’s largest telecoms, lost 2% on Sept. 17 after its mother company TeliaSonera said it would leave Eurasian markets.

London-listed Bank of Georgia surged 3.9% this week to 1,907 pence. The GDR stock of Georgia’s TBC Bank lost 6.5% this week in London, down to $9.25 per share, though it had fallen to $9.11 on Sept. 14.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kyrgyz som slips to new low

SEPT. 16 2015, BISHKEK (The Conway Bulletin) — Kyrgyzstan’s som dropped to its lowest level against the US dollar since independence, forcing the Central Bank to step in to brake its fall.

At exchange kiosks in Bishkek, the som traded at 72/$1 before recovering to around 69/$1 after the Central Bank’s intervention. Still, the fall in the som, now down 13% in the past month, has pushed up inflation and worried people.

“Food is getting more expensive, it definitely reflects on the family budget,” a 52-year-old man who declined to be named said as he left a supermarket in central Bishkek.

When the Kyrgyz government pushed the country into the Russia- led Eurasian Economic Union last month it said food prices would fall.

Emil Umetaliev, a Bishkek-based analyst, said this promise has been shown to be empty. “How can they be cheaper if in Russia they are getting more expensive because of an internal crisis?” he said.

To stop the slide, the Central Bank bought $18m worth of som but a source at the Bank told the Bulletin officials were anxious.

“The Bank made intervention but it did not particularly affect such a fast growth of dollar,” she said.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kyrgyzstan accuses PM

SEPT. 17 2015 (The Conway Bulletin) – Kyrgyzstan’s First Deputy PM Tayirbek Sarpashev accused some political parties of hampering the Oct. 4 parliamentary election by trying to illegally collect voters’ biometric data. Mr Sarpashev did not name the parties.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kyrgyz bank to issue debt

SEPT. 16 2015 (The Conway Bulletin) — The Kyrgyz Investment and Credit Bank (KICB), a popular lender in Kyrgyzstan, said it wants to issue debt worth 200m som ($2.9m), its largest ever issue. “The total amount of outstanding debt securities issued by the bank has reached 450m som, about 1% of the total volume of the bank’s liabilities,” Aliyev Bektur Kubanychbekovich, KICB deputy chairman, told local media.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kyrgyzstan should diversify assets

SEPT. 15 2015 (The Conway Bulletin) – Kyrgyz should diversify their assets, including cash, to protect themselves from the sharp swings in the value of currencies and commodities, Raushan Seitkazimova, head of the Central Bank’s monetary control unit, told media. The value of the Kyrgyz som has been fluctuating wildly, over the past few months.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Kyrgyzstan increases alert on border

SEPT. 9 2015 (The Conway Bulletin) – The Kyrgyz military has ordered its units on high alert around the border with Tajikistan because of an increase in tension, media reported. Reports were not specific on what had triggered the alert but Tajikistan and Kyrgyzstan have rowed about border issues this year.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

EEU goods reach Kyrgyzstan

SEPT. 4 2015 (The Conway Bulletin) – Belarusian dairy producer Turovsky Milk Factory exported its first batch of products to Kyrgyzstan, media reported quoting a company spokesman. The shipment is notable because it appears to suggest that, in this instance, the concept of the Russia-led Eurasian Economic Union trade bloc is working.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Currency: Kyrgyz som, Kazakh tenge

SEPT. 11 2015 (The Conway Bulletin) — The Kazakh tenge and the Kyrgyz som dropped to record lows this week, as economies in Central Asia and the South Caucasus continued to show structural weaknesses.

By the end of Friday, the tenge traded at around 264/$1, down from 240/$1 at the start of the week. That’s a drop of 10%. The Kyrgyz som fared slightly better but still dropped through the 67/$1 barrier. A week earlier it had traded at around 65.5/$1.

Over the border in Tajikistan, the somoni held its own. This may have had something to do with a massive cash injection from China. It agreed to buy 3b yuan ($470m) worth of somoni in a so called currency swap deal. This is a thinly disguised mechanism to prop up the ailing somoni which has lost 17% of its value this year.

In the South Caucasus the currencies were broadly stable, although the Georgian lari lost some ground, falling to around 2.40/$1 compared with a price of around 2.36/$1 a week earlier.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Eurasian Economic Union causes problems for Kyrgyz business

BISHKEK, SEPT. 11 2015 (The Conway Bulletin) — Kyrgyzstan’s entry to the Eurasian Economic Union last month has created confusion and extra bureaucracy for businesses, Aziz Soltobayev, founder of the online store svetofor.info, said in an interview with The Bulletin.

Mr Soltobayev, 32, said the Kyrgyz government had failed to give clear instructions on what impact membership of the Eurasian Economic Union would have.

“There is not much to be happy or thrilled about,” he said at his company’s headquarters, a converted house in central Bishkek. “For example if you want to export you have to be on the exporter’s list and this means more bureaucracy and inspections and examinations.”

Kyrgyzstan became the fifth member of the Russia-led Eurasian Economic Union last month. Kazakhstan, Belarus and Armenia are also members. The problem is that when the idea of the Eurasian Economic Union was floated, Russia was in the ascendency. Now its economy has tipped into recession.

“Oil prices were really high and it [Russia] was just booming,” Mr Soltobayev said. “But things have changed. The war with Ukraine, US sanctions and the devaluation of the rouble has made this Union miserable, just the worst place.”

And the costs are growing too. Svetofor.info buys stock from China but Mr Soltobayev said prices for imported goods had already increased significantly.

Regarding svetofor.info, which he started in 2004, Mr Soltobayev said its best-selling products were mobile phone handsets. On the streets of Bishkek, most people seemed glued to mobile phones.

Mr Soltobayev said svetofor.info was going to quit its remaining high street shops altogether in the next few years and move its operation completely online.

“With access to the internet and with the decline (in price) of data packages people are using it more and more,” he said. “We see now that people are buying products on their mobile phones. They don’t have desktop phones any more and we see people doing this not just in the city but also in the countryside.”

Fashion, he said, is all important with the latest smartphone being the number one accessory for Kyrgyz.

“They would certainly rather buy an iPhone and live in miserable conditions,” he said.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)