JULY 22 2021 (The Bulletin) — The Armenian dram and the Georgian lari both climbed by 1.5% to their highest levels for several months. Analysts said that a raft of positive economic news and GDP growth estimates from the likes of the IMF have strengthened belief in their economies.

For Armenia, the value of 487.1/$1 is its highest level since September last year, before a war against Azerbaijan. At the start of the year, the dram was valued at 522/$1, which means that it has risen in value by nearly 7%.

As for the Georgian lari, it is now valued at 3.0862/$1, which is its highest level also since September last year before a disputed parliamentary election. In March it was valued at 3.3326/$1, a rise of 7.4%. Despite fast-rising inflation, the IMF said that Georgia’s economy would recover quickly from the pandemic and increase in size by 7.7%.

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— This story was published in issue 493 of the Central Asia & South Caucasus Bulletin, on July 22 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

JUNE 16 2021 (The Bulletin) — Armenia’s Central Bank increased its key interest rate by 50 basis points to 6.5% because it said that economic demand was beginning to rise and potential inflationary tendencies needed to be curbed. This helped push up the Armenian dram to 513.6/$1, a rise of more than 1% and its highest level against the US dollar since mid-December.

The dram fell heavily after Armenia lost a war to Azerbaijan last year over the disputed region of Nagorno-Karabakh. Before the war started at the end of September, the dram had traded at around 484/$1. In April, at its lowest, the dram had fallen to 534/$1. This means that it has recovered by 4% since then despite an acrimonious campaign ahead of a parliamentary election on June 20.

Most other currencies were steady with their values protected by a rise in the key interest rate from the Russian Central Bank. 

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

JUNE 8 2021 (The Bulletin) — The Georgian lari continued to appreciate against the US because, currency traders said, stronger-than-expected economic data had restored confidence in the once-battered currency.

Specifically, traders pointed to year-on-year GDP growth in April nearly 45% higher than the same period in 2020, at the start of the coronavirus pandemic. The lifting of various restrictions and the start of the summer tourist season have also given the lari a boost. By the end of the week, it was trading at 3.1469/$1, a rise of 3.4%, to its highest level since September last year. Overall, the lari has risen by 7.5% since the start of April.

As for other currencies, they were broadly trading level with the Armenian dram nudging up slightly and the Kyrgyz som and Uzbek soum falling slightly.

The Kazakh tenge was trading flat.

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— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

MARCH 15 (The Bulletin) — Currency markets in Central Asia and the South Caucasus were once again subdued. The Armenian dram continued to slip slightly, down 0.2%,  dragged down by its protracted post-war political crisis. It lost a war against Azerbaijan for control of Nagorno-Karabakh in November last year and PM Nikol Pashinyan has been fending off calls to resign ever since.

The Armenian Central Bank has said that it will do all it can to prop up the currency and analysts have said that its sales of US dollar reserves has stemmed a run on the dram.

In neighbouring Georgia, which has also been convulsed by political instability, the Georgian lari was steady at 3.3141/$1. An intervention by the European Union, which is trying to mediate between opposition forces and government, has given the market hope that the political standoff will end. 

Other currencies were flat, with the Uzbek soum trading slightly down.

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— This story was published in issue 475 of the Central Asia & South Caucasus Bulletin, on March 15 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

FEB. 11 2021 (The Bulletin) —  The Kazakh tenge was the biggest winner over the past week, rising by 1.3% to 418/$1, essentially regaining its losses of the previous week. The tenge has been trading in a range of between 415 and 430 to $1 since the middle of last year. 

Across the Caspian Sea to the region’s other heavily traded currency, the Georgian lari, the Central Bank there kept interest rates steady because it said that inflation had slowed. This was in-line with other Central Banks across the region but it still disappointed the markets and the Georgian lari slipped slightly in value. 

Away from the lari and the tenge, the Armenian dropped nearly 1%, despite a small increase in rates by the Central Bank which has signalled that it wants to strengthen its currency. The dram has been under pressure since Armenia lost a war against Azerbaijan last year over the disputed region of Nagorno-Karabakh. In November, it was valued at 490/$1.

— ENDS

— This story was first published in issue 471 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021