Tag Archives: currency

Kazakh car imports halve

OCT. 29 2015 (The Conway Bulletin) – In Jan.-Aug. 2015, Kazakhstan imported 54,000 cars, roughly half the amount of cars imported during the same period last year. Russia accounted for 85% of the car import market. Between January and August, the Kazakh tenge was overvalued against the rouble, making imports from Russia cheap. The Kazakh Central Bank effectively devalued the tenge in August.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Currency: Kazakh tenge, Kyrgyz som

OCT. 30 2015 (The Conway Bulletin) — In this current regional economic crisis, when currencies are stable it has to be positive.

The US Federal Reserve Bank kept interest rates unchanged, giving some more breathing room to currencies across Central Asia and the South Caucasus.

This was one of the first stable weeks for currencies in the region after heavy turbulence shook, ravished even, the markets.

The three free-floating currencies followed a similar pattern this week, weakening only marginally.

The Kazakh tenge lost just 0.5% of its value against the US dollar, ending at 279.2/$1 on Friday. The Kyrgyz som followed suit losing 0.7% of its value at 69.4/$1. The Georgian lari was stable at 2.39/$1.

In Tajikistan, the Central Bank said the somoni lost 30% of its value in the year to Sept. 2015. On Friday, it was stable at 6.62/$1.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Kyrgyzstan keeps interest rates stable

OCT. 27 2015 (The Conway Bulletin) – The Kyrgyz Central Bank said after its monthly monetary policy meeting that it was keeping interest rates stable at 10% after pressure on the som currency eased in October. Last month, it raised rates by 2% to halt a slide in the value of the som. It lost 16% of its value in June-Sept.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Azerbaijan’s Sofaz revenues drop

OCT. 26 2015 (The Conway Bulletin) -The value of Azerbaijan’s sovereign wealth fund Sofaz dropped by 6.4% to $34.7b between Jan 1 and Oct 1, it said, a decrease that highlights the impact of the fall in oil prices and collapse in the value of its manat currency. Sofaz earns revenues from oil and gas contracts.

ENDS

(News report from Issue No. 254, published on Oct. 30 2015)

Kyrgyzstan’s housing market slows

OCT. 20 2015, BISHKEK (The Conway Bulletin) — Kyrgyzstan’s real estate market has slowed, media reported quoting a land registry report, more evidence that the overall Kyrgyz economy is stalling.

Analysts from the department of land registry said that the number of house sales this year had dropped by around 42% and the market for apartments was down by 34%.

The official position was the housing market had cooled off because prices were simply too high but a construction company in Bishkek said that the real reason activity in the housing market had fallen was the drop in the value of the Kyrgyz som against the US dollar.

“Sanctions on Russian economy definitely affect the purchasing power of our citizens because the US dollar is the currency for real estate transactions,” a construction company manager who wanted to remain anonymous told the Bulletin.

Roughly in line with other currencies in the region, the som has lost around 33% of its value over the past 12 months and is now trading at around 69/$1.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Azerbaijan’s GDP growth falls

OCT. 20 2015 (The Conway Bulletin) – Azerbaijan’s government said its economy would grow by only 1.8% next year compared to 4.4% this year because of low oil prices and a drop in production. Parliament also approved a national budget for 2016 of 14.6b manat ($13.9b), down by 10.4% from last year.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Currency: Kazakh tenge, Georgian lari

OCT. 23 2015 (The Conway Bulletin) — Despite all the reassuring declarations coming from Astana and the Central Bank in Almaty, volatility will be a constant for the Kazakh currency over the next months. There is just no getting away from it.

On Wednesday, Kairat Kelimbetov, Kazakhstan’s Central Bank chief, said 277.5 tenge/ $1 is an acceptable rate as long as oil prices float around $50 per barrel. Already on Friday, Brent prices fell to $48 and the tenge followed to 278.2. Over the past fortnight it has lost 1.5% against the US dollar.

Other currencies fared better this week, maintaining their value. The Georgian lari was steady at 2.39/$1 and even the Kyrgyz som had a calm week below 69/$1.

Rumours of devaluation are more worrisome in Uzbekistan, where the sum is officially stable at around 2,663/$1, but the website dollaruz.com said informal rates on the Black Market are hitting over 5,700 sum/$1.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Azerbaijan considers 2nd devaluation

OCT. 13 2015 (The Conway Bulletin) – Azerbaijan is considering following Kazakhstan and allowing its manat currency to float free, the head of the Central Bank Elman Rustamov said to media, effectively warning of a another devaluation. Azerbaijan devalued its currency by 33% in February but has still had to spend billions defending its value since then.

ENDS

(News report from Issue No. 253, published on Oct.16 2015)

Kazakhstan’s bail-out for savers to cost $420m

OCT. 7 2015, ALMATY (The Conway Bulletin) — A Kazakh government bail-out for hundreds of thousands of savers who hold tenge denominated deposits hit by a currency devaluation in August could cost the state around $420m, according to the Bulletin’s calculations.

The bail-out adds to the lengthening bill that the Kazakh state is having to foot to weather a worsening economic storm that has hit the Central Asia and South Caucasus region.

It has spent billions of dollars propping up its currency and also said that it will give handouts and tax breaks to key industries heavily effected by the economic downturn such as car-makers and smaller oil producers.

And in an effort to shore up support immediately after the devaluation on Aug. 20, President Nursultan Nazarbayev said savers would be compensated for losses incurred when the Central Bank ditched the tenge’s peg to the US dollar and allowed it to drop heavily.

Now, at a press conference in Almaty, Alexander Trentyev, director of the consumer protection department at the Central Bank, for the first time hinted at the bill that the government was facing.

“The compensation will cover the period August 18 2015 to September 30 2016. Over 1.7m accounts totalling around 250b tenge are eligible for the government aid,” media quoted him as saying.

The tenge is currently trading at around 275/$1, a drop of around 46% from its value of 188/$1 just before the devaluation on Aug. 20. This means that the 250b tenge in bank deposits will convert to 365b tenge and cost the government $420m in compensation. Of course, though, as analysts have said, the tenge could well drop further in value before Sept. 30.

But there is a flip-side for savers. Their accounts will be frozen for 13 months until Sept. 30 2016.

This measure appears to have been adopted to prevent customers from rushing to withdraw their savings and turning them into US dollars after they received compensation.

It will also keep a high level of tenge in the currency markets, a policy the Central Bank has said that it favours.

What the authorities are desperate to avoid during this period of economic turbulence is civil unrest. The bail-out of savers appears designed to ward this off.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Currency reserves fall to 4-year low in Azerbaijan

OCT. 3 2015 (The Conway Bulletin) – The IMF said that rising inflation in Azerbaijan was a growing risk and the Central Bank said that its currency reserves had fallen to their lowest level for nearly four years, more data that points to a worsening outlook for the Azerbaijani economy.

In its World Economic Outlook, the IMF said that inflation would measure 5% this year in Azerbaijan, a reflection of the pressure prices have been under since February when the Central Bank devalued its manat currency by 33%.

And so are the Central Bank’s declining currency reserves.

These have fallen to just over $7b at the end of September from $7.3b in August, its lowest level since November 2011 when it was recovering from the 2008/9 Global Financial Crisis.

It’s been a steep, fast fall. At the end of 2014, Azerbaijan’s currency reserves were nearly double at $13.7b.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)