Tag Archives: Armenia

Inflation rises in Armenia

NOV. 20 2015 (The Conway Bulletin) – Prices in Armenia grew by 4.4% in the first 10 months of the year, media quoted the National Statistics Service as saying, pointing to high overall inflation for 2015.

Inflation has forced its way back onto the top of Central Bankers’ agenda this year. A collapse in local currencies’ values against the US dollar has triggered a sharp rise in prices for energy imports and domes- tic electricity production.

Inflation in Armenia is probably lagging inflation in neighbouring Georgia because the government has chosen to suck up the cost of the electricity price rises rather than pass

it on to consumers after a series of major demonstrations in the summer. In Georgia, the government has more successfully passed the cost of the electricity production on to consumers.

But, importantly, with another two months of the year to be factored into the final calculation, inflation in Armenia is already running above the initial estimates in the 2015 budget.

Trade turnover is also down, 20% lower in the first 10 months of the year compared to the same period in 2014. This is generally in-line with other economies across the Central Asia and South Caucasus region.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Polymetal raises Kazakh gold reserves and buys in Armenia

NOV. 13/16 2015 (The Conway Bulletin) — The Russian miner Polymetal upgraded gold reserve estimates at its Kyzyl mine in eastern Kazakhstan and said it had bought a 75% stake in Armenian diamond mine Lichkvaz that it didn’t already own.

Both the reserve upgrade at Kyzyl and the buyout of Lichkvaz will give the mining industries in Armenia and Kazakhstan a major boost.

At the Bakyrchik mine at its Kyzyl project, Polymetal said that a feasibility study had upgraded the size of gold reserves there by 8% to 29.2m tonnes.

Polymetal will run further exploration works until the end of 2016 and expects to reach full output capacity at the mine in 2019. Polymetal said it is ready to invest $328m for the next phase of the project.

Polymetal CEO Vitaly Nesis said in a statement: “With significantly reduced capital expenditure, compelling high-grade reserves and straight- forward execution plan, Kyzyl is set to become a significant free cash flow contributor for Polymetal.”

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Currencies: Kyrgyzstan’s som, Kazakhstan’s tenge

NOV. 13 2015 (The Conway Bulletin) — The Kyrgyz Central Bank intervened in the currency market, selling around $14m on Friday to halt the fall of the som. It still fell 3% over the week finishing at 72.1/$1.

In Kazakhstan, the tenge was stable at 307/$1, although it reached a record low of 312/$1 on Monday.

The Georgian lari was stable at 240/$1 throughout the week.

In Armenia and Uzbekistan, currencies fell faster than previously. The Armenian dram lost 1% to 480.9/$1 and the Uzbek sum fell by 0.5% to just above 2,700/$1 on the official market. On the Black Market, the US dollar is reportedly selling at 6,200sum.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Armenia cuts interest rates to counter low prices

NOV. 10 2015 (The Conway Bulletin) – Armenia’s Central Bank lowered its key interest rate by half a percentage point to 9.75%, its lowest level since January, because of slowing inflation.

The interest rate move highlights the delicate balance that Central Banks across Central Asia and the South Caucasus are having to strike between defending their currencies and stimulating growth to navigate through a deepening economic crisis.

The Central Bank said a drop in commodities prices and slowing global demand had dented price growth.

It said that inflation last month measured 0.4%, compared to 1% in October 2014. Overall annualised inflation measured 1.9% for the 12 months to the end of October.

“The board estimates that this trend will continue in the coming months and will have a deflationary impact on domestic prices,” the Central Bank said of weakening global commodities prices.

Armenia’ currency, the dram, has dropped by 15% this year against the US dollar. Its interest rates had risen to 10.5% in February but prices in Armenia have slowed, dragging down overall inflation.

The biggest problem for Armenia, like most of its neighbours in the South Caucasus is the recession in Russia.

This has hit vital remittance flows and also savaged is key export market. The Armenian dram is now overvalued against the Russian rouble and demand inside Russia has also dropped, hitting overall export potential.

This month, as the Bulletin reports in this week’s Business News, the country’s biggest fish farm business declared itself bankrupt. Its biggest market had been Russia and this market had disappeared.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

EU-Armenia to conclude deal

NOV. 12 2015 (The Conway Bulletin) – Final negotiations between the EU and Armenia over a deal to replace a failed 2013 association agreement should be concluded by the end of the year, Karen Nazaryan, deputy Armenian foreign minister said. The deal is important as it increases EU interaction with Armenia.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Armania increases electricity exports

NOV. 9 2015 (The Conway Bulletin) – Armenia wants to increase exports of electricity, natural resources minister, Levon Shahverdyan, said, more evidence that it wants to become a region energy exporter. Iran and Georgia are both dealing with power shortages.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Russian to install missiles in Armenia

NOV. 11 2015 (The Conway Bulletin) – Russia will install an air defence missile system in Armenia, RIA- Novosti news agency reported quoting a statement from the Kremlin, a rival, perhaps, to the US missile system in Eastern Europe. By stationing missiles in Armenia, Russia is pulling it tighter into its field of influence.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Armenia’s fish farm declares bankruptcy

NOV. 12 2015 (The Conway Bulletin) — Unable to repay its debt to the banks, Unfish, one of Armenia’s largest fish farms, declared bankruptcy. Unfish’s exports to Russia, its main market, have fallen by 50% due to the weakening of the rouble against the Armenian dram. Armenia’s Fish Farmer’s Union asked the government to prevent more bankruptcies.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Armenia lifts poultry ban

NOV. 4 2015 (The Conway Bulletin) — Armenian authorities lifted a ban on imports of poultry meat and by-products from three US states — Nebraska, South Dakota and Wisconsin. In May, Armenia’s Food Safety Service had banned poultry imports from 13 US states, following an outbreak of avian influenza in the US. Armenia lifted the ban for 10 US states in July.

ENDS

(News report from Issue No. 255, published on Nov. 6 2015)

Eurasian Dev Bank to give Armenia $300m crisis loan

NOV. 4 2015 (The Conway Bulletin) – The Almaty-based Eurasian Development Bank is close to agreeing a deal to lend the Armenian government $300m to help it through the economic malaise enveloping the Central Asia and South Caucasus region.

If it is agreed, the first $100m is due at the end of this year with the outstanding $200m handed over by the end of 2017.

Like other countries in Central Asia and the South Caucasus, Armenia has been trying to deal with the fallout of the drop in oil prices and a recession in Russia which have combined to tip the entire region into an economic depression.

“Current macroeconomic actions have been agreed with the Armenian government,” Dmitry Pankin, the EDB CEO, told the Armenpress news agency.

“The project has been approved by the expert council and is now being considered by the Eurasian Stabilisation and Development Fund. After the official decision, the final conditions will be agreed upon.”

The Eurasian Development Bank is an overtly political organisation. It’s membership mirrors the membership of the Kremlin-led Eurasian Economic Union — Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia — with the addition of Tajikistan.

It was set up before the Eurasian Economic Union to give the trade bloc extra weight.

It also acts as a kind of sweetener. Armenia is reliant on Russia for economic and political support. It joined the Eurasian Economic Union at the start of this year under duress from Russia but can now access cheap loans to keep its economy running.

ENDS

(News report from Issue No. 255, published on Nov. 6 2015)