Author Archives: admin

India’s Modi gives a clear message in Turkmenistan

Indian PM Narendra Modi travelled to Turkmenistan as part of this grand tour of Central Asia and urged for progress on a gas pipeline that will pump Turkmen gas to India to be accelerated.

TAPI, the name of the pipeline, is due to select its consortium leader on Sept. 1 and Mr Modi told Turkmen leader Kurbanguly Berdymukhamedov that he wanted the construction phase to begin soon.

“The most significant initiative in our relationship is the TAPI Gas Pipeline,” he said in a statement released to the media. “This could transform regional economic cooperation and bring prosperity along the route. We welcomed the agreements between the four countries for the pipeline. We underlined the need to implement the project quickly.”

The TAPI project is ambitious. It envisions a route across Afghanistan and Pakistan to India.

And Mr Modi appeared aware of the potential problems this route could encounter.

He also suggested that, if there were problems, a land-sea route via Iran could be used to ship gas to India from Turkmenistan.

TAPI is slated to cost around $10b and to run for 1,800km.

Kazakh Central Bank widens tenge trading corridor

Kazakhstan’s Central Bank chief Kairat Kelimbetov extended the bandwidth that the tenge could trade against the US dollar to 182-198 from 182-188, effectively giving it room to devalue by over 5%.

Hours after Mr Kelimbetov’s statement, exchange bureaus in Kazakhstan had already upped the price of $1 to over 188 tenge, breaking the psychological 187 value it had been pegged around for so long.

A drop in the value of the Russian rouble and the price of oil has pressured the tenge. The Kazakh Central Bank has stood firm, though, and defended the value of its currency while neighbours have devalued.

Still, Mr Kelimbetov said external pressures had triggered the bandwidth extension and that the move was designed to shift the tenge towards a full free-float over the next 12 months.

“This corridor allows the currency to fluctuate independently of the negative scenarios that may take shape outside Kazakhstan,” he said.

Mr Kelimbetov, though, said he didn’t see the tenge dropping below 192 against the dollar in the next 6 months.

The government has said that it wants its monetary policy to target inflation rather than a tenge-US dollar rate.

This bandwidth extension follows on from a gentle recalibration of the tenge. The Central Bank has allowed it to lose a couple of percentage points in value against the US dollar this year. In February 2014, the Kazakh Central Bank devalued overnight by 20%.

Azerbaijan’s Central Bank cuts interest rates

JULY 10 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank cut its key interest rate by 50 basis points to 3% to give its non-oil sector a boost.

Like other countries in the region, Azerbaijan has been trying to cope with an economic downturn triggered by a fall in Russia’s economy and a drop in the price of oil.

The Central Bank said Azerbaijan’s economy had stabilised since it devalued its manat currency by a third in February.

“The Azerbaijani economy remains resilient amid recent processes in the global economy and in the region continuing its stable growth,” the Azerbaijani Central Bank said in a statement.

“The monetary policy can be further eased given the acceptable level of inflation and dynamics of money supply.”

The cut in interest rates, though, is likely to put more pressure on the manat currency. This was momentarily relieved by the devaluation. Since then, data from the Central Bank has shown it has continued to spend heavily propping up its currency, although there was a rebound over the past few months which may have prompted the interest rate cut. Azerbaijan’s foreign currency reserves now measure $8.5b compared to 13.7b at the end of 2014.

Azerbaijan’s economy is skewed towards oil and gas.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Georgia’s anti-monopoly agency fines petrol retailers

JULY 15 2015 (The Conway Bulletin) – Georgia’s Competition Agency fined the country’s five largest petrol retailers $23m for price fixing. The companies fined were SOCAR Georgia Petroleum, Sun Petroleum Georgia, Rompetrol Georgia, Wissol Petroleum Georgia, and Lukoil Georgia.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Tajik aluminium exports rise

JULY 14 2015 (The Conway Bulletin) – TALCO, the aluminium smelter in Tajikistan, exported 3.6% more aluminium in the first half of 2015 compared to the same period in 2014, the statistics agency said. TALCO is one of the biggest aluminium smelters in the world and generates around 70% of Tajikistan’s foreign currency earnings.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Lavrov visits Uzbekistan

JULY 15 2015 (The Conway Bulletin) – Russian foreign minister Sergei Lavrov travelled to Uzbekistan from Vienna where he had been attending a summit on Iran. Besides the usual talk of cooperation, Kommersant newspaper reported that Uzbek sources reassured Mr Lavrov that cooperation with the US will not develop at the expense of relations with Russia.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Kazakhstan’s GDP growth slows

JULY 10 2015 (The Conway Bulletin) – Kazakhstan’s GDP grew 1.7% in the first half of this year, the statistics agency said. This is within estimates but is less than half the growth during the same period in 2014. Low oil prices and a drop in the value of the rouble have hit Kazakhstan.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Kazakhs issue sovereign debt

JULY 14 2015 (The Conway Bulletin) – In a move designed to plug a gap in it finances, Kazakhstan issued a $4b bond in two tranches.

These 10 and 30 year eurobonds with an initial yield of 3% and 3.5% over their US Treasuries equivalents were the second debt issued by Kazakhstan since October 2014, highlighting just how heavily a drop in oil prices had hit its budget.

And bond traders said that the yield, a measure of the risk factor attached to taking on the debt, had been relatively high.

“Remarkably, the placement yields are even higher than Russian sovereign bond yields,” Reuters quoted Alexey Bulgakov, a senior credit analyst at Sberbank, as saying.

Kazakhstan had not been active in the sovereign debt market since 2000, so two issues in the past nine months show how badly Kazakhstan needs the cash.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Georgia’s PPI jumps up, again

JULY 15 2015 (The Conway Bulletin) – Georgia’s Producer Price Index (PPI) measured 10.2% higher in June compared to a year earlier, Geostat reported, signalling creeping inflation. Geostat said manufacturing prices had pushed up. Georgian officials have been warning of inflation linked to the devaluation of the lari.

ENDS

(News report from Issue No. 240, published on July 16 2015)

Kyrgyz-Russia trade falls

JULY 14 2015 (The Conway Bulletin) – Trade turnover between Kyrgyzstan and Russia fell by 17.3% in January-May 2015 as compared to the same period in 2014, according to the Russian Customs Service. This is more evidence of the knock on effect on Central Asia of Russia’s economic downturn.

ENDS

(News report from Issue No. 240, published on July 16 2015)