Tag Archives: currency

Currencies: Kazakhstan’s tenge, Uzbekistan’s soum

JUNE 19 2017 (The Bulletin) — Falling oil prices have dented the Kazakh tenge, pushing it down to 320/$1, its lowest level since mid- February. This is a fall of 1.5% for the week, matching the fall of Brent oil. Brent oil was down at $47.37/barrel, down 1.6% for the week.

Overall, though, the Kazakh tenge is still trading up around 4% from where it started the year, although it has fallen back from highs hit in May. In May, the tenge traded at 310.6/$1 and had looked at one point as if it was going to push through the barrier.

There was little other currency moves this week, with the Azerbaijani manat staying unaffected by the fall in oil prices, and the Uzbek soum continuing its steady weekly 0.7% tick down.

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(News report from Issue No. 333, published on June 19 2017)

Currencies: Kyrgyzstan’s som

JUNE 12 2017 (The Bulletin) — The Kyrgyz som dropped another 0.3% over the week, adding to a general downward trend since the end of April when it briefly threatened to break through the lower 67/$1 barrier.

On April 27, the Kyrgyz som hit 67.13/$1, a level not seen since the currency devaluation of 2015/16. Since then the som has fallen back to a level that analysts have said is a more natural range of between 68 and 69 per $1. It is now trading at 1.25% higher than at the start of the year.

Elsewhere, the Uzbek soum continued its slow downward trajectory and the Kazakh tenge moved closer to falling through the 316/$1 barrier, a level not seen since the beginning of May. It has generally tracked down with oil.

Cerrencies: Kazakhstan’s tenge, Kyrgyzstan’s som

JUNE 5 2017 (The Bulletin) — In a week of little movement, it fell to the Kazakh tenge to, quite literally, fall – but only slightly. It fell 1.1% to trade at a shade above 314/$1, its lowest since mid-May.

The move was, probably, triggered by a downward shift in Brent oil prices. The price of Brent dropped to just above $50/barrel. This is still within the generally accepted trade corridor and the impact on oil-sensitive currencies around the world was limit. The surprise was that the Azerbaijani manat, already smashed by the near- collapse of its biggest bank, didn’t shift downwards.

Elsewhere, the Uzbek soum continued its slow and controlled depreciation, down 0.6%, and the Kyrgyz som fell 1.1% to 68.1/$1 – its lowest since the end of April.

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Copyright ©Central Asia & South Caucasus Bulletin — all rights reserved

(News report from Issue No. 331, published on June 5 2017)

 

Inflation and joblessness hurt Kazakhs as economy struggles to improve

TRAIN 702TS/Kazakhstan, MAY 28 2017 (The Conway Bulletin) — The Kazakh oil executive, Serik, was clear enough. The economic problems in the system were hitting and hurting everybody and, importantly, it was much worse than the authorities were letting on.

“It took me a year to find a job. It shouldn’t take that long” he said. “I know people who are selling their property because they just can’t find work. They are selling and getting out, moving to Singapore or elsewhere.”

Through the window the Kazakh steppe rushed past. At this time of year, the clumps of long grass were only just beginning to turn an arid brown.

Serik took another sip of his beer. The bar on the train was full of men drinking beer, cheerfully, killing time before they could return to their berths and sleep. It’s a 13-hour journey from Astana to Almaty on the Spanish-built Talgo train.

Serik was heading to Almaty to meet up with old university class- mates from his time at the Kazakh State University. In an ordinary year, he said that he would fly to Almaty but this year he was looking to save money.

“The jobs have disappeared and inflation is eating people’s salaries. Not many people are happy at all,” he said. He popped another peanut into his mouth and took a long sip of his beer.

A collapse in oil prices from 2014 and a recession in Russia, Central Asia’s economic driver, forced Kazakhstan’s economy into a downward trajectory.

It is recovering now, but slowly. The tenge has halved in value, companies have laid off staff and prices are rising, faster than salaries.

Serik’s frustrations at the Kazakh economy, and his warning that things were worse than the government was prepared to let on, were repeated across Kazakhstan. In Astana, an engineer working on the government’s tech projects complained that his salary had been kept the same for years. As a subcontractor the engineer was not covered by government wage rises of around 20%, even though the cost of living had risen between 20% and 40%.

“It’s all about saving now,” he said. “As for foreign summer holidays, forget it.”

The rate of inflation given by the engineer was confirmed by several other people. It was far higher than the official inflation rate of 8%, down from 18% in the middle of 2016.

Later, in Almaty a Russian real estate dealer said that the market had pretty much flatlined. Very little was being sold or bought as prices were too unstable.

Last year, too, buyers had started to insist that he accept tenge for property deals, adding another level of instability.

“Things will get better,” he said. “But, right now, it doesn’t feel good at all.”

And there is more evidence of this on the streets of Almaty, the country’s commercial hub.

Like cavities fouling a row of perfect white teeth, empty shops displaying ‘to let’ signs scarred Almaty’s main shopping streets.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 330, published on May 28 2017)

 

Currencies: Tajikistan’s somoni

MAY 28 2017 (The Conway Bulletin) — Most currencies in the Central Asia and South Caucasus region have had a reasonable start to the year, gaining as oil prices have been sustained and the Russian economy has stabilised.

The Tajik somoni, though, has not been one of these currencies. Instead, it has continued to slide and is now trading at around 8.82/$1, down 12% from the start of the year.

This is 85% down from the start of 2013.

Analysts have said that confidence in the somoni is low as the Central Bank looks to bail out various banks which have found themselves in trouble. Tajikistan’s banking sector has been teetering on the verge of collapse for some time, only staving off being wiped out by government bail outs.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 330, published on May 28 2017)

 

Currencies: Kazakhstan’s tenge, Azerbaijan’s manat

MAY 12 2017 (The Conway Bulletin) — Pledges to cut output and to support prices pushed up oil to $50.85/barrel, its highest in May, giving support to both the Kazakh tenge and the Azerbaijani manat. They both inched up slightly, with the tenge finishing on 315.54/$1, up nearly 1%, and the Azerbaijani manat hitting 1.6775/$1, also up around 1%.

As the graph shows, the tenge has risen by 8.6% since the start of November, giving the economy and the Central Bank much-needed breathing space. Gains since mid- February, though, have been limited and a deeper look at tenge shows that it has under performed against oil prices. The price of Brent oil has increased by 13.4% since the start of November, far outstripping tenge.

Of the other currencies, the long Victory Day holiday slowed trade and there was little movement, up or down, except with the Uzbek som. This is a tightly managed currency and the authorities have been slowing cutting its value to reflect a general slowdown in the economy. Once again, over the course of the last week, the som’s value has fallen by around 0.8%.

As for equities, it was also a fairly steady week with Centerra Gold gaining the most, up 7.5%. Caspian Sunrise stock is inelastic and changes tend to be wild.

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(News report from Issue No. 328, published on May 12 2017)

Currencies: Azerbaijani manat

MAY 5 2017 (The Conway Bulletin) — Despite a fall in oil price to $48.48 on May 4 and $49.10 on May 5 (that’s the price of a barrel of Brent) the Azerbaijani manat managed to regain some of the ground it has lost in the past few weeks.

Oil and gas are the driver of the Azerbaijani economy but although prices have fallen from around the $55 mark that OPEC has been targeting the manat was trading at 1.6972/$1, near recent highs.

As the graph shows, since the beginning of April the manat has gain 2.2% against the US dollar while oil prices have fallen by 5.6%. The main reason for the slump in oil prices is a concern about growing US stockpiles of oil.

On the equities side of the markets, KAZ Minerals, formerly called Kazakhmys has had a bumpy ride. It shares surged after strong Q1 results showed that output had grown. It hit a 5-week high of 503.5p on May 1 only to fall heavily in the following few days. A sharp drop in the price of copper, its main export, forced down its share price to 445.6p by May 5.

This was a heavier fall than the fall in the price of copper which dropped 5% to $252.85/lb. The fall in copper prices was linked to concern over China’s slowing industry and the failure of US President Donald Trump to deliver on promises to support copper prices.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 327, published on May 5 2017)

Currencies: Kazakh tenge and Azerbaijani manat

APRIL 28 2017 (The Conway Bulletin) — Softer oil prices have pushed down the value of the Kazakh tenge and the Azerbaijani manat. The tenge is now trading at 313.8/$1, its lowest value since March and the manat is trading at 1.665/$1, a two week low.

Oil has come off a high on April 11 of $56.23/barrel to be trading at around the $51/barrel mark. The main driver of the dip in oil prices is geopolitical concerns over US intervention in Syria and the spike in tension around the Korean peninsular. Both Azerbaijan and Kazakhstan are price takers and will have to settle for whatever the geopolitical machinations hand them.

On the equities front, it has been a very good fortnight for TBC Bank. It has ragreed a $100m loan from the EBRD to implement the so- called Deep and Comprehensive Trade Agreement with the EU. This is designed to boost trade between Georgia and the EU. TBC Bank’s share price has risen by around 20% this year and analysts are positive.

“Looking ahead, TBC Bank is expected to record a rise in its bottom line of 8% this year, followed by further growth of 14% next year,” said share analyst The Motley Fool. “When combined with its relatively low P/E ratio, this puts it on a PEG ratio of only 0.8. This suggests that more share price growth could be ahead for the company.”

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(News report from Issue No. 326, published on April 28 2017)

Panic fuelling monetary crisis, says Tajik CBank

APRIL 13 2017 (The Conway Bulletin) — Tajikistan’s Central Bank said that panic speculation was driving up the cash exchange rate against the official rate to dangerous levels. The Reuters news agency said that the official somoni rate was 8.49 somomi/$1 compared to 8.9/$1 at cash exchanges. Tajikistan’s banking system has been teetering on the verge of collapse, only propped up by the government.

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(News report from Issue No. 325, published on April 17 2017)

Money changers still operate in Uzbekistan

TASHKENT, APRIL 10 2017 (The Conway Bulletin) — Money changers still hawk for custom outside nearly all markets and shopping malls in Uzbekistan despite reports of a crackdown on the trade that has become a part of the Uzbek scene over the past 25 years.

A correspondent for the Conway Bulletin said that he had received around double the official Uzbek som/US dollar exchange rate on the Black Market. The Uzbek government has been devaluing the Uzbek som by around 1.4% per week since September last year. It now measures around 3,650 som.

Last month reports appeared that Uzbek police had been arresting money changers at some of Tashkent’s biggest markets. The Conway Bulletin correspondent, though, reported that money changers appeared to be operating with impunity, touting for business across the capital.

At rural markets, the correspondent said money changers carried wads of cash in bags and openly haggled with people looking to change som into US dollars.

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(News report from Issue No. 324, published on April 13 2017)