SEPT. 10 2015 (The Conway Bulletin) – Iran’s Khazar Exploration and Pro- duction Co. (KEPCO), a subsidiary of National Iranian Oil Company, met with officials from the Azerbaijani state oil and gas company SOCAR in Tehran to discuss how best to work together to explore and exploit oil fields in the Caspian Sea. Iran has has begun to re-integrate into the global community.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 4 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank spent nearly $1.2b defending the value of it manat currency in August despite devaluing it by a third earlier in the year.
With oil prices, the key driver of Azerbaijan’s economy, stubbornly hovering around 7-year lows, the data will add more pressure onto the currency and suggests that another devaluation may be possible. Across the Caspian Sea, oil-exporter Kazakhstan effectively devalued its currency for a second time last month after trying to defend it for over a year.
Reuters quoted a high-placed source at the Azerbaijani Central Bank as saying: “August 2015 was difficult from a financial point of view. The economies of large countries of the world declined and the price of oil also fell on world markets, which influenced the state of the manat.”
The Central Bank data showed that its reserves had fallen to $7.31b by the end of August from $8.5b at the end of July.
The South Caucasus and Central Asia region is trying to cope with a sharp decline in its economy. Suppressed oil prices and a recession in Russia have dragged down growth. Azerbaijan with its dependency on oil has suffered more than most.
The latest data means that the Azerbaijani Central Bank has spent 42% of its total reserves this year.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 4 2015 (The Conway Bulletin) – SOCAR, the Azerbaijani state oil and gas company, said in the first 8 months of 2015 it shipped 930,671 tonnes of oil to Russia, up from 677,785 tonnes during the same period in 2014. Azerbaijan- Russia relations have improved over the past year as Azerbaijan’s relations with the West have faltered.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 9 2015 (The Conway Bulletin) — Perhaps the most important feature of news and data from the region’s money markets this week was details about the various Central Banks’ gold and currency reserves.
Kazakhstan’s Central Bank said it had increased its reserves in August to $29.1b. Kazakhstan has amassed reserves over the past 3 months after spending around $400m in April to contain the effects of the regional financial crisis.
In Kyrgyzstan, the Central Bank’s reserves hit $2b, according to the Central Bank, back up to the levels of August 2014.
In Baku it was another story. The Central Bank has been spending ferociously since it devalued its manat currency by a third in February. According to the state-linked Trend news agency, the Azerbaijani Central Bank spent 14% of its foreign currency reserves in August. In the last year, Azerbaijan has spent half its foreign currency reserves trying to defend the manat.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 9 2015 (The Conway Bulletin) — The Fitch ratings agency warned investors of the precarious state of Azerbaijan’s banking sector.
Authorities in Azerbaijan have put a brave face on the country’s shaky economic conditions but the Fitch report cut through the bluster.
“We believe capital positions at some banks are likely to come under significant pressure over the medium term from increasing credit losses,” Fitch said. “Capital cushions are only moderate in most cases, and internal capital generation is limited.”
Azerbaijan depends on oil and gas for over 90% of its exports, meaning that it haPs been particularly exposed to the collapse in oil and gas prices. GDP growth is slated at the relatively low 1.5%.
In February, the Central Bank devalued the manat currency by a third denting its credibility. Despite the devaluation, fresh data has shown that the Central Bank has still spent billions defending its new value.
Non-performing loans are likely to grow from their current level of 10%, a consequence that Fitch sees inevitable, especially given the growing amount of loans and deposits denominated in foreign currency.
“We expect zero loan growth for the banking sector in 2015,” Fitch said. “Asset quality, already somewhat strained, with impaired loans averaging 10% at end-1H15 at Fitch-rated banks, is likely to deteriorate further.”
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 8 2015 (The Conway Bulletin) – The UN High Commissioner for Human Rights, Zeid Ra’ad al-Hussein, condemned Azerbaijan’s crackdown on media, the latest high profile institution to criticise Baku. On Sept. 1, a court in Baku jailed journalist Khadija Ismayilova for various financial crimes.
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(News report from Issue No. 247, published on Sept. 11 2015)
SHARABASH/Azerbaijan, SEPT. 11 2015 (The Conway Bulletin) — In northwest Azerbaijan, rain coated the mountain-ringed village of Sarabash with a glossy sheen. Walnut trees glistened and the smell of grass lifted up from the wet fields. It was 8am on a weekday morning but there were no signs of commerce or industry. Just silence.
Remote and cut-off, Sarabash was not connected to the rest of Azerbaijan by road until the 1970s. Today, the track is rock-strewn and rough and the villagers feel, once again, as though they have been forgotten.
The Soviet-era collective farming system, and their livelihoods, have collapsed. Baku and its environs may glow from a beautifying oil boom that has made Azerbaijan rich over the past decade but rural areas have been left behind. Sarabash feels forgotten.
Before the fall of the Soviet Union, collective farms did well up here. In the 1960s there were 40,000 cows and dozens of farming families.
The pair of crumbling statues that stand in the fields are testament to this. They represent the two shepherds who played a part in the village being given a Communist award in 1964. Since independence the villagers admit they have fallen on hard times. Only 40 people – and one shepherd – remain.
When the school principal, Migdav Sofiev, grimaced he revealed his full set of gold teeth. He shook his head and described the desolate state of the village.
“There are only seven children at the village school and when they leave, it will close,” he said.
By comparison the town of Qax lies just 45-minutes away from Sarabash. Throughout the summer there holidaymakers eat in garishly decorated restaurants while their children play in bowling alleys and on bouncy castles.
Over a glass of ayran, a thin, sour yogurt drink; some mountain honey; a disc of tandoor-baked bread, villagers said that despite the untouched mountain scenery it is extremely rare for foreigners to visit. Tourists are keener on the amenities in Qax and they don’t bother to come either.
A sense of resigned despair lingered over the breakfast table.
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(News report from Issue No. 247, published on Sept. 11 2015)
AUG. 4 2015 (The Conway Bulletin) – In an interview with the state-run Turkish news agency Andalou, Afghan vice-president General Abdul Rashid Dostum said he believed the Islamic extremist group IS would target Azerbaijan and the South Caucasus. IS has been increasing its recruitment drive across Central Asia and the South Caucasus.
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(News report from Issue No. 246, published on Sept. 4 2015)
SEPT. 2 2015 (The Conway Bulletin) – The security forces in Azerbaijan said they had detained five men for bring- ing arms into the country, planning various attacks and having links to the Islamic extremist group IS. Media reported that the five men had had links to IS in Syria and Iraq between 2013 and 2015.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 246, published on Sept. 4 2015)
SEPT. 3 2015 (The Conway Bulletin) – The price of food in Azerbaijan fell by 0.3% in August compared to July, the state’s statistical service told media. The fall in prices highlights the turmoil that the drop in the value of the manat and the collapse in oil prices has created.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 246, published on Sept. 4 2015)
