Tag Archives: central bank

The Kazakh Central Bank devalues the tenge

FEB. 11 2014 (The Conway Bulletin) — On what has been dubbed “Black Tuesday”, Kazakhstan’s Central Bank devalued the tenge by 20%.

The sudden move was designed to relieve pressure on the currency, despite Central Bank chief Kairat Kelimbetov saying for months that a devaluation was not on the cards. Last month he even urged Kazakhs to save more in tenge.

With the United States preparing to increase interest rates, the dollar has been strengthening and currencies in emerging markets have been under increased pressure. It had only been a matter of time before the Kazakh tenge flinched but the sudden drop will still have major consequences.

Mr Kelimbetov’s credibility has been badly damaged. He’s only been in the job since October so he’s still a relative novice. Longer term, the depreciation shows the tenge as weak and unstable.

Most of Kazakhstan’s imports are designated in dollars and so inflation is expected to rise fast; the depreciation of the tenge has also wiped out millions of dollars of ordinary Kazakhs’ savings.

This is the second sharp tenge devaluation in five years and there is a real chance that ordinary Kazakhs won’t trust the currency again.

In Almaty, some ATM machines stopped working for a couple of hours after the announcement and shops closed for the day. The public was worried.

Ainur, an Economics undergraduate said she was “concerned about a possible hike of her tuition fees. Gulmira, the administrator of a busy grocery shop, said prices had not yet increased but would soon. Near to her shop, electronics stores had taken down their price tags. Their websites were also closed for business.

On twitter, there has been talk of demonstrations against the devaluation. Feelings are running high.

ENDS
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(News report from Issue No. 171, published on Feb. 12 2014)

Azerbaijan warns banks over loans

JAN. 23 2014 (The Conway Bulletin) — Azerbaijan’s Central Bank issued a stern warning to its domestic banks to tighten up checks they carry out on consumers before issuing loans. The Azerbaijani economy is booming but increasingly unsecured loans could derail this growth.

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(News report from Issue No. 169, published on Jan. 29 2014)

Azerbaijan’s Central Bank worries over bad loans

JAN. 24 2014 (The Conway Bulletin) — Azerbaijan’s Central Bank ordered domestic banks to stop giving out loans to consumers so easily.

In a strongly worded statement, Azerbaijan’s Central Bank said lenders had not been doing enough due diligence on the financial security of consumers they were lending cash to.

“The Central Bank has assigned banks to intensify activities on issue of loans and enhance control over the field in line with responsible lending principles with an eye to further amplify banking sector’s financial sustainability,” the Azerbaijani Central Bank said.

The Central Bank appears to be reacting to a number of warnings from analysts who said that poorly secured loans and rising consumer debt are major risks to Azerbaijan’s economy.

Azerbaijan’s fuel-powered economy has picked up pace again since stumbling during the global economic crisis of 2008/9. In 2014, the economy is expected to grow by around 5%.

But overconfidence and slack controls threatens this economic growth. The Central Bank’s own figures showed that lending to consumers increased by nearly a third last year.

The Central Bank also appears to accuse commercial banks of aggressively selling loans to consumers and also warned them not to give out misleading information over the financial responsibilities of taking out loans.

ENDS
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(News report from Issue No. 169, published on Jan. 29 2014)

Kazakh Central Banker foresees no devaluation

JAN. 21 2014 (The Conway Bulletin) — Brushing aside growing speculation over the Kazakh economy, Kairat Kelimbetov, head of Kazakhstan’s Central Bank, said there were no plans to devalue the Kazakh tenge. Media reports quoted Mr Kelimbetov after analysts openly questioned whether the tenge was too expensive.

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(News report from Issue No. 168, published on Jan. 22 2014)

Tajikistan cuts interest rate

JAN. 13 2014 (The Conway Bulletin) — Tajikistan cut its key interest rate to a record low of 4.8% to combat falling inflation, media reported quoting the Central Bank. It previously cut the key interest rate to 5.5% in October 2013. Falling inflation, marking slower economic growth, is a major concern for Central Banks in the South Caucasus and Central Asia.

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(News report from Issue No. 167, published on Jan. 15 2014)

Uzbekistan cuts interest rate

JAN. 1 2014 (The Conway Bulletin) — Uzbekistan’s Central Bank cut its key interest rate to 10% from 12% to try and combat falling inflation, media reported. Uzbekistan’s interest rate had been 12% since January 2011. Analysts expect official inflation in Uzbekistan to fall in 2014 to around 6% from 7% in 2013.

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(News report from Issue No. 166, published on Jan. 8 2014)

Kazakhstan looks to reduce bad loans

DEC. 5 2013 (The Conway Bulletin) — In an interview with Bloomberg News in London, Kazakhstan’s Central Bank chief Kairat Kelimbetov said one of his main objectives was to cut the proportion of nonperforming loans in Kazakh banks to 10% by January 2016. Non-performing loans currently make up about 30% of its banks’ portfolio.

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(News report from Issue No. 164, published on Dec. 11 2013)

Kazakhstan to move Central Bank to Astana

NOV. 15 2013 (The Conway Bulletin) — Kazakhstan’s new Central Bank chief, Kairat Kelimbetov, said he wanted to move the Bank to Astana from Almaty. Mr Kelimbetov replaced the independent-minded Grigory Marchenko as the Central Bank chief in October. Reports have said Kazakh President Nursultan Nazarbayev wants the Central Bank in Astana.

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(News report from Issue No. 161, published on Nov. 20 2013)

Kazakhstan appoints new Central Bank chief

OCT. 9 2013 (The Conway Bulletin) — If the outgoing Kazakh Central Bank chief Grigory Marchenko was an independent-minded career finance-man, Kairat Kelimbetov, the new one, could not be more different.

Mr Kelimbetov, 44, has instead picked a career path through the ranks of Kazakh officialdom based on efficiency and party loyalty. Now he has been thrust into the spotlight as the surprise choice of Kazakh President Nursultan Nazarbayev to replace Mr Marchenko.

Some say Mr Nazarbayev sacked Mr Marchenko, others that he resigned for family reasons. Whatever the reason, Mr Kelimbetov takes over a demanding brief. Mr Nazarbayev has said that he wants to unite Kazakhstan’s pension funds. There is also intensifying downward pressure on the tenge.

Mr Kelimbetov is the son of a well-known Kazakh academic. His peers are the group of Kazakhs in their mid-40s who are now assuming some of the top jobs. These include Timur Kulibayev, the president’s son-in-law.

He started his career at various government planning departments before becoming the minister of economy in 2002. That posting launched his career which began to carry the hallmarks of a favourite of Mr Nazarbayev.

Mr Kelimbetov was made a deputy head of Mr Nazarbayev’s Nur Otan political party in 2007 and for a few months in 2008 he was head of the presidential administration, a powerful position. In 2008, he took over as chairman of Kazakhstan’s sovereign wealth fund Samruk-Kazyna until 2012 when he became a deputy prime minister.

At each stage of his career, Mr Kelimbetov has parachuted into a role picked for him by Mr Nazarbayev. Heading the Central Bank is another important notch in his distinctive career resume.

(News report from Issue No. 155, published on Oct. 9 2013)

Kazakhstan changes Central Bank chief

OCT. 1 2013 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev sacked the country’s long-serving Central Bank chief Grigory Marchenko in a surprise move that may sow doubt over Kazakhstan’s economic direction.

Former economy minister Kairat Kelimbetov will take over from Mr Marchenko.

Mr Nazarbayev didn’t give a clear reason for sacking Mr Marchenko, considered a favourite of investors. Mr Marchenko, 53, was brought in to head Kazakhstan’s Central Bank for a second time in 2009 to help weather the financial crisis. Under his leadership Kazakhstan nationalised a handful of banks that were teetering on the brink of collapse and devalued the tenge national currency.

Mr Marchenko won international plaudits and in 2011 was touted as a possible replacement for Dominique Strass- Kahn, the disgraced French politician, as head of the IMF.

More recently, Kazakhstan’s Central Bank has been grappling with downward pressure on the tenge and the reorganisation of the country’s pension funds.

Mr Nazarbayev may have just decided that it was time for a change and to replace the notoriously independent-minded Mr Marchenko with the more pliant Mr Kelimbetov.

(News report from Issue No. 154, published on Oct. 2 2013)