Tag Archives: remittances

Tajik C.Bank spends half reserves defending currency

>>Tajik CBank can’t afford aggressive defence of somoni again>>

JAN. 20 2015 (The Conway Bulletin) — Russia’s rouble crisis is pushing Tajikistan to the brink of bankruptcy. The Tajik Central Bank has said that it spent half the country’s reserves last year trying to prop up its currency against the falling rouble.

These are worrying times for Central Asia’s governments. A combination of falling oil prices and Russia’s economic turmoil is pressuring their own finances.

Remittances from Russia have fallen sharply in value over the past six months or so, undermining economies in Tajikistan and Kyrgyzstan especially.

Central Banks have been spending heavily to try to bolster their currencies against a falling Russian rouble but this has proved difficult.

Despite spending half its national reserves — there is now less than $500m left in the Central Bank’s reserves — the value of the Tajik somoni has still fallen over 10% against the US dollar. Inflation has also risen.

All the signs are that 2015 will be complicated too. What the Tajik government can’t afford, though, is another costly battle to defend the somoni.
ENDS

(News report from Issue No. 215, published on Jan. 21 2015)

Inflation climbs in Tajikistan

>>Central Bank has already increased interest rates this year>>

DEC. 29 2014, (The Conway Bulletin) — Inflation in Tajikistan jumped to over 7% in 2014, the Central Bank said, around double the rate in 2013.

The final figures for the year are not yet out but the Central Bank said annualised inflation up to the end of November had been 6.8% and that this would creep up again when December’s data was analysed.

Tajikistan raised its interest rates in October to 6.9%, its highest level since 2012, up from 4.8% earlier in the year, to try and steady its economy against rising inflation.

With remittances from Russia, which contribute to around 50% of GDP, dropping because of a slowdown in the Russian economy, Tajikistan is facing up to an increasingly tough time.

News that inflation is rising just adds to the headache.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Tajik remittances decline by 6%

DEC. 5 2014 (The Conway Bulletin) – Remittances from Russia have declined by around 6%, the head of the Tajik Central Bank, Abdujabbor Shirinov, told the IMF. Western media groups and analysts have said that the decline in income from Tajiks working in Russia and sending cash back home — a vital funding flow — had been greater.

ENDS

(News report from Issue No. 212, published on Dec. 10 2014)

Remittances for Tajikistan fall

DEC. 2 2014 (The Conway Bulletin) – A sharp downturn in Russia’s economy has squeezed migrants, particularly from Tajikistan which is so heavily dependent on remittances, Reuters reported. Reuters highlighted one migrant worker who said that he had been paid 25,000 roubles ($536) a month but that this had been cut to 15,000 roubles.

ENDS

(News report from Issue No. 211, published on Dec. 3 2014)

Armenia remittances fall

NOV. 6 2014 (The Conway Bulletin) – Remittances to Armenia from Russia were 8.6% lower in September this year than in the same month in 2013, media reported quoting the Central Bank. Armenia’s economy is closely linked to Russia which is suffering from a severe downturn triggered by a falling oil price and Western imposed sanctions.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

Tajik economy sliding, says WB

OCT. 27 2014 (The Conway Bulletin) – Tajikistan’s GDP has fallen by 0.8% this year compared to 2014, the World Bank said, more evidence that economies closely-linked to Russia are suffering from sanctions imposed by the West.

The World Bank said that a fall in remittances from Tajik workers in Russia had translated into weaker domestic demand for goods.

“A Russian slowdown affects Tajikistan largely through the remittances channel,” the World Bank wrote in its report.

“A slackening in remittances weighs heavily on household demand, notably demand for services and housing construction.”

This is particularly worrying for Western countries which are counting on a strong and stable Tajikistan to act as a bulwark against any movement by the Taliban northwards into Central Asia from Afghanistan.

Most of the former Soviet Union has been hit by Western sanctions imposed on Russia because of its alleged intervention in the Ukraine civil war but the World Bank also said that a generally weak global demand for industrial goods was impacting Tajikistan too.

It said that industrial growth had fallen to 3% from 7% a year earlier because of low global industrial demand and falling cotton and aluminium prices.

These sentiments mirror the Tajik Central Bank. Both also predicted that inflation would gradually become an increased concern in Tajikistan.

ENDS

(News report from Issue No. 206, published on Oct. 29 2014)

Tajikistan raises interest rates

OCT. 9 2014 (The Conway Bulletin) – Tajikistan’s Central Bank increased its key interest rate by 1% to 6.9%, its highest level in two years, to try and dampen rapidly rising inflation.

Like other countries in former Soviet Central Asia, Tajikistan’s economy is suffering from the knock-on effect of sanctions on Russia. Remittances from workers based in Russia generate around half of Tajikistan’s GDP. This revenue stream has dried up since the sanctions dampened Russia’s economy.

But Tajikistan is also battling rising inflation. Inflation measured over 5% for the first eight months of this year, nearly double the rate for last year.

The main problem for Tajikistan is that as well as weakening remittance flows from Russia, importing goods has become more expensive.

Rising inflation and a weakening economy is a nightmare combination for Tajikistan.

This was also the second interest rate increase by Tajikistan this year. In May it boosted interest rates by 1.1% to 5.9%. Previously it had cut rates on eight consecutive occasions.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Remittances falling for Uzbekistan

SEPT. 22 2014 (The Conway Bulletin) – Remittances to Central Asia from sanctions-hit Russia have fallen by around 8%, the European Bank for Reconstruction and Development (EBRD) said. Heaviest hit in Central Asia is Uzbekistan which sends back the most remittances from Russia, although this forms a lower proportion of GDP compared to Kyrgyzstan and Tajikistan.

ENDS

(News report from Issue No. 201, published on Sept. 24 2014)

New Russian route for Tajik migrants

SEPT. 12 2014 (The Conway Bulletin) – Asian Express Airline, a private airline, will fly two return flights next month to the city of Barnaul in Russia’s Siberia from Dushanbe for migrant Tajik workers, media reported. The new route shows the economic power and importance of remittances from migrant workers to the Tajik economy.

ENDS

(News report from Issue No. 200, published on Sept.17 2014)

Uzbekistan wants migrants to return

SEPT 3 2014 (The Conway Bulletin) – Regions across Uzbekistan have started work on a government edict to try and lure the thousands of Uzbeks working abroad back home, even though the economy is looking decidedly dodgy and the chances of full time employment are low.

Uznews.net, an Uzbek opposition website, reported that Samarkand, the second largest city in the country, has proposed all migrants who return will get given a job.

“I witnessed people like myself being forced to live a nomadic life in dirty conditions, without rights in a foreign land,” the website reported one Samarkand resident as saying in a propaganda drive.

“If we were to work as hard at home as we work in Russia, we would make good money.”

The drive to persuade migrants to return to Uzbekistan apparently came in July from Uzbek PM Shavkat Mirziyoyev.

It also coincided with news that Russia was going to make it more difficult for migrants to enter and also that the sanctions imposed on Russia since fighting in Ukraine started has reduced demand for casual migrant workers. This may have dampened demand for migrants from Central Asia who would typically do the cleaning and building jobs around Moscow and other large Russian cities.

Even so, Uzbekistan relies heavily on remittances from workers based in Russia and working on a campaign to encourage them back home is likely to be counter- productive.

Uzbekistan has plenty of infrastructure of its own to deal with, including crumbling road, rail and power networks, so, possibly, calling on more people to move back to Uzbekistan is counter productive.

ENDS

(News report from Issue No. 198, published on Sept. 3 2014)