Tag Archives: currency

Currencies: US dollar, Kazakh tenge

DEC. 16/18 2015 (The Conway Bulletin) — In the weeks leading up to an interest rate increase by the US Federal Reserve Bank on Wednesday, Central Banks in the South Caucasus and Central Asia fretted about possible repercussion on their own currencies.

Janet Yellen, who chairs the Fed, said interest rates would go up by 25 basis points from 0.25% to 0.50%. The Fed had postponed the decision for months and a rate increase was widely expected.

What will happen now to Emerging Markets? The US dollar will inevitably become more attractive to investors, which are likely to pull capital away from Emerging Markets back to the US.

The day after the rate increase, the value of the dollar grew by 1% against six major currencies. This, in turn, could further depress the price of commodities and pressure currencies in Central Asia and the South Caucasus.

Shortly after the Fed’s decision, the Georgian Central Bank also raised its interest rates to 8%, up from a level of 7.5%. And the following morning the Central Bank of Azerbaijan issued a statement saying it expects the new rate to affect the currency markets in the region.

Kazakhstan had been on holiday while all this was happening, celebrating the 24th anniversary of its independence, but the impact on the Central Bank and the tenge have been tangible for weeks. The Central Bank twice skipped its monthly policy meetings in November and December, leaving analysts puzzled. On Friday, when Kazakhstan woke up from its festivities, the tenge hit an all-time low of 342.5/$1.

ENDS

(News report from Issue No. 261, published on Dec. 20 2015)

Kazakhstan shifts to tenge

DEC. 8 2015 (The Conway Bulletin) – At a government meeting, Kazakh Central Bank chief Daniyar Akishev said all prices should be given in tenge. One of Mr Akishev’s main objectives is to make the tenge more prominent and to de-dollarise the economy. Many goods and services — rent, hotel rooms and luxury goods — are still priced in US dollars.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Currencies: Kazakhstan’s tenge, Kyrgyzstan’s som

DEC. 11 2015 (The Conway Bulletin) — The Kazakh tenge keeps hitting record lows against the US dollar, trading around the 310/$1 mark in the second half of this week, and there is little indication that it will reverse this trend. The Central Bank has said it wants to scrap its previous monetary policy and find new solutions. The message it sent was, in essence: “we will play it by ear.” So much for restoring confidence in its monetary policies.

The Kyrgyz som stopped its fall and found its equilibrium at 75.6/$1 this week, the first stable week in months.

All other currencies were steady this week.

Next week, the US Federal Reserve Bank will hold a policy meeting. Analysts are bracing for the first interest rate rise since 2009.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Kyrgyzstan CBank changes rules

DEC. 9 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank changed the reserve requirements for its commercial banks to reflect the less stable state of the Kyrgyz som. It reduced the proportion of minimum reserves held in som by 4.5% to 4% of a bank’s total reserves and also increased the requirement to keep 12.5% of the bank’s cash in foreign currency, up 2.5%.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Real estate price rise in Kazakhstan

DEC. 7 2015 (The Conway Bulletin) – In tenge terms, prices for new housing in Kazakhstan have risen on average by 12% in the year to the end of November, media reported quoting the national statistics agency. The rise is a reflection of the devaluation of the tenge and also of rising inflation. The tenge has lost around 40% in value this year.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Tenge/$ reaches balance

DEC. 9 2015 (The Conway Bulletin) – The tenge/$ rate has reached a balanced position, Kazakh PM Karim Massimov said, suggesting that the national currency will not lose much more value against the US dollar. By Dec. 9, the tenge traded at around 309/$1. It has lost around 40% of its value this year.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Kyrgyzstan keeps rates steady

DEC. 1 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank decided to keep its interest rate unchanged at 10% for the third month running because of slowing inflation. It also said that its reserves had fallen by 12% this year as it tried to defend its currency.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Kazakh Central Bank skips meeting

DEC. 3 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank cancelled its monthly monetary policy meeting for the second consecutive month, disappointing markets which were looking for guidance on future policy. The Central Bank said that money markets were too unstable for it to announce policy. Critics said it had lost control of the tenge.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Inflation rises in Kazakhstan

DEC. 4 2015 (The Conway Bulletin) – Inflation in Kazakhstan to the year ending Nov. 30 measured 12.8%, the state’s statistics committee said. The sharp prices rises show the impact of the tenge devaluation on the economy. The main inflation driver has been food prices.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Tajik somoni hits record low

DEC. 1 2015 (The Conway Bulletin) – Tajikistan’s somoni currency fell to its lowest ever level of 7/$1 just as the Central Bank was bringing in draconian new rules which will shut all independent exchange kiosks within two months.

So far this year, the somoni has lost 31% of its value. The Central Bank has previously admitted that it is on the verge of running out of money, having spent its reserves propping up its ailing currency.

The Central Bank issued a statement saying that the remaining 763 currency exchanges would be closed over the next few months and that people would only be allowed to make currency exchanges through the banks.

Ordinary Tajiks have seen this before. In April, the Central Bank issued a similar edict which closed half the exchange booths in the country. It didn’t stop the currency slide, though.

Between April and the end of November, the somoni fell from 5.8/$1 to 6.7/$1, a fall of 15.5%.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)