Category Archives: Central Asia & South Caucasus News

Azerbaijan revokes another banking licence

FEB. 2 2016 (The Conway Bulletin) — Azerbaijan’s Central Bank revoked the licence of Texnikabank, one of the country’s largest lenders, and handed back a licence to NBCBank after it said it was looking at a possible merger with a bigger rival.

The moves are part of a wider plan by the Azerbaijani Central Bank to tighten and strengthen Azerbaijan’s commercial banking sector.

The Central Bank said Texnikabank, one of Azerbaijan’s 10 largest banks by assets, did not comply with the minimum capital requirement of 50m manat ($31.3) and the capital adequacy ratio. Texnikabank became the seventh bank in Azerbaijan to lose its licence in the past few weeks.

It later handed NBCBank back its licence after it said that it had entered into negotiations with KredoBank and ParaBank about a possible merger.

Another commercial bank, Caucasus Development Bank, said it intends to merge with Gunay Bank and Atrabank.

Azerbaijan is trying to deal with the fallout from a sharp drop in the price of oil, its main export. This has hit its economy and its currency, the manat, putting increasing pressure on the banking sector.

There are currently 37 commercial banks operating in Azerbaijan.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Georgian President walks about in Pankisi George

JAN. 30 2016 (The Conway Bulletin) – In a PR stunt aimed at knocking down Russian allegations that the radical group IS had set up a training camp in the Pankisi Gorge, Georgian president Giorgi Margvelashvili travelled to the region with the US and EU ambassadors for a walk-about and to talk to locals. Russian foreign minister Sergei Lavrov said in January that the Pankisi Gorge was an IS recruiting ground.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kyrgyz CBank should cut spending, says IMF

FEB. 4 2016 (The Conway Bulletin) – Kyrgyzstan’s Central Bank needs to slow its interventions in the currency market in order to avoid depleting its reserves, the IMF said at the end of a mission to Bishkek. The IMF had been on a fact-finding mission ahead of a meeting in April when Kyrgyzstan hopes to extend its borrowing. Its Central Bank has been buying som heavily to support its value.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Grange builds plant in Armenia

FEB. 4 2016 (The Conway Bulletin) — Pakistani firm Grange Power agreed a deal with Armenia over the construction of a 234 MW gas-fired power station near Vanadzor in northern Armenia.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Tajikistan pays remittances in somoni

FEB. 3 2016 (The Conway Bulletin) – Tajikistan’s Central Bank ordered all remittances sent from Russia to be paid out in the local somoni currency. The Central Bank said the move was designed to support the somoni. It has lost around a third of its value over the past few months. Remittances to Tajikistan, vital to the economy, are down. Russia is the main source of remittances.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

ArcelorMittal cancels second pay rise for Kazakh workers

ALMATY, FEB. 1 2016 (The Conway Bulletin) — ArcelorMittal’s steel factory in Kazakhstan scrapped plans to raise workers’ salaries in June because of worries about continued weak market conditions for its products.

In January, ArcelorMittal increased salaries for its 14,000 workers at its steel plant in Temirtau, central Kazakhstan, by 6.8% and had promised another pay rise of 6.8% six months later, but in a letter to employees Vijay Mahadevan, the factory’s CEO, said that this was not now going to happen.

“Unfortunately, we have not fulfilled our plans for 2015, and therefore will not be able to pay the remainder of the wage increase this year,” he said.

“I know that this news will disappoint you, but no-one would benefit from a salary increase which will only put additional pressure on our company.”

A 50% drop in the value of the tenge and rise in inflation has hit workers’ real wages in Kazakhstan and forced many employers to raise salaries.

ArcelorMittal Temirtau is one of the biggest employers in Kazakhstan. It has had, though, tempestuous relations with its workers over salaries in the past few years and had to make thousands of staff redundant. The factory has added symbolic importance as President Nursultan Nazarbayev worked there before moving into politics.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

China expresses interest in Kazakh Mangistau

FEB. 2 2016 (The Conway Bulletin) – Alik Aidarbayev, head of the Mangistau region of western Kazakhstan, said that only China has expressed serious interest in paying for the construction of a new oil refinery. The Mangistau region has been working on plans to build Kazakhstan’s fourth refinery for years. Mr Aidarbayev’s comments are important because they show both the financial power of China and the relative weakness of Russia. Kazakhstan has been looking to boost its refinery capacity for some time. It currently has three refineries.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

IMF draws funding plan for Tajik Rogun

FEB. 4 2016 (The Conway Bulletin) – IMF representatives met with Tajik government officials in Dushanbe to draw up funding plans for the $2b Rogun hydropower plant. The IMF has said that the World Bank-backed Rogun project, strengthening its banking sector and diversifying the economy are priorities for Tajikistan. Down- stream Uzbekistan has lobbied hard against the Rogun dam.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kazakhstan raises interest rate

FEB. 1 2016 (The Conway Bulletin) – Kazakhstan’s Central Bank raised interest rates by 1 percentage point to 17%, its first monetary policy move for three months. The Kazakh tenge has been sliding in value and the Central Bank has at times appeared powerless to stop this. It has slowly increased interest rates but to limited effect.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Uzbek capital installs bus wifi

FEB. 4 2016 (The Conway Bulletin) – Tashkent’s state-owned bus company Toshshahartranshizmat has started to trial free wifi on its buses around the Uzbek capital, media reported, a signal of just how ubiquitous wifi has become in Uzbekistan. Uzbekistan’s security forces closely monitor internet use. Uzbekistan is considered one of the most repressive countries in the world.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)