JUNE 25 2015 (The Conway Bulletin) – Kazakhstan increased its gold reserves for the 32nd month in a row, the IMF said. Kazakhstan’s gold reserves measure 203.4 tonnes. Despite spending heavily to protect the tenge, the Kazakh Central Bank has maintained its policy of buying gold.
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(News report from Issue No. 237, published on June 25 2015)
JUNE 15 2015 (The Conway Bulletin) – Prices manufacturers in Georgia are paying to produce their goods are rising at the fastest rate since 2011, the national statistics agency said, sparking concern that underlying inflation may also be accelerating.
Georgia’s Central Bank has said it wants to fight off the effects of regional economic turmoil and the falling value of its lari currency and keep inflation under control.
But Geostat, the Georgian statistics agency, said its Producer Price Index (PPI) rose by 0.8% in May from April, registering an increase of 9% from May 2014.
“Manufacturing prices increased 11.1% contributing 9.05 percentage points to the overall index growth,” Geostat said of the PPI growth rate figures.
“The prices mainly increased for manufacture of food products, beverages and tobacco products (16.9%), manufacture of paper and publishing (30.4%) and manufacture of basic metals and fabricated metal products (4.0%).”
The 9% year-on-year increase in May was the highest inflation in prices paid by producers since 2011 when the economies were recovering from the 2008/9 global financial crisis and price inflation was a major concern. Now inflation, triggered by a falling lari, is once again a headache that the Central Bank has to confront.
The lari has lost around 20% of its value this year. The Georgian Central Bank has been putting up interest rates to try to strengthen its currency and dampen inflationary pressures.
Geostat’s Consumer Price Index measured a jump in inflation of 0.6% in May, measuring a rise to 3.5% of year-on-year inflation, its highest since September 2014.
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(News report from Issue No. 236, published on June 18 2015)
JUNE 15 2015 (The Conway Bulletin) – Fuel prices in Kyrgyzstan are rising, media reported quoting the Kyrgyz Association of fuel traders. They said extra tax imposed by the Kyrgyz government had triggered the rise. Kyrgyzstan is also facing general inflation due to the falling value of its currency.
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(News report from Issue No. 236, published on June 18 2015)
JUNE 10 2015 (The Conway Bulletin) – Georgia’s foreign exchange reserves fell by $37.4m in May to $2.4b, the Central Bank said. Georgia has sold foreign currency reserves to prop up its lari currency.
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(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – Azerbaijan’s foreign currency reserves inched up in May for the first time in a year, according to Central Bank data, suggesting that pressure on its manat currency had eased off. Like other countries in the region, Azerbaijan has been fighting to maintain the strength of its currency.
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(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – Oleg Smolyakov, deputy chairman of Kazakhstan’s Central Bank, said a change of monetary policy to target inflation instead of a stable exchange rate would not be possible within the next couple of years, the first sign of a row back on the high- profile strategy.
The potential row-back will disappoint businesses and international observers who have urged the Kazakh Central Bank to allow its tenge currency to float more freely.
“We believe that we cannot afford switching to inflation targeting within a time range of one to two years,” media quoted Mr Smolyakov as saying.
This is a departure from the bullish declaration by Central Bank chief Kairat Kelimbetov who said Kazakhstan would liberalise its currency market.
According to Mr Smolyakov, Kazakhstan needs more tools to switch from the current currency corridor to targeting inflation. A sharp fall in the value of the Russian rouble since last summer has pressured currencies and economies across the region.
Also, seemingly eager to smooth public concerns over a volatile currency, Mr Smolyakov said the Kazakh tenge would remain stable with oil prices over $50 per barrel.
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(News report from Issue No. 235, published on June 11 2015)
JUNE 3 2015 (The Conway Bulletin) – Azerbaijanis have lost confidence in the manat currency since a 33% devaluation earlier this year, eurasinet.org reported. It said dollar accounts in Azerbaijan now made up 70% of the total, the highest proportion in a decade.
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(News report from Issue No. 234, published on June 4 2015)
MAY 21 2015 (The Conway Bulletin) – Halyk Bank, Kazakhstan’s second largest bank majority owned by the daughter of Kazakh president Nursultan Nazarbayev and her husband Timur Kulibayev, posted year-on-year profits down 29%. Costs had risen, in particular workers’ salaries. Kazakhstan devalued its currency in 2014, triggering wage inflation.
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(News report from Issue No. 233, published on May 28 2015)
MAY 22 2015 (The Conway Bulletin) – Uzbekistan’s Central Bank denied it was restricting access to US dollars as a form of controlling its currency.
Two days earlier, the Tashkent-based Uzmetronom.com website quoted unnamed but, supposedly, reliable sources as saying that the Central Bank had halted the process for foreign and local companies to convert their local currency into US dollars for an unspecified period of time.
This is critical for companies which are keen to get their cash out of the country. Not being allowed to convert it severely undermines their operations.
Now, though media have quoted the Uzbek Central Bank as saying that this is not true.
Like the other countries in Central Asia, Uzbekistan trying to cope with a drop in oil prices and a fall Russia’s economy which has rippled across the region.
Last week, media reported that a senior official in the Uzbek Central Bank had written a letter to his superiors to warn that the country was running out of cash and that it could hardly afford to pay for vital services and salaries.
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(News report from Issue No. 233, published on May 28 2015)
MAY 19 2015 (The Conway Bulletin) – The IMF weighed into the debate surrounding the tenge when it said the Kazakh Central Bank had enough cash to defend the currency against a sudden devaluation. The Central Bank has been under increased pressure to follow neighbours and devalue its currency.
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(News report from Issue No. 232, published on May 20 2015)
