APRIL 18 2015 (The Conway Bulletin) – Tajikistan’s Central Bank ordered currency exchange points throughout the country to be closed to try and protect its somoni currency losing more value. The somoni is under pressure as remittances from Russia dry up. It has lost 15% of its value this year.
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(News report from Issue No. 228, published on April 22 2015)
APRIL 10 2015 (The Conway Bulletin) – In a rare anti-government protest in Kazakhstan, dozens of homeowners demonstrated in Astana about the extra pressure they are under to meet US dollar denominated mortgage repayments, media reported. The Central Bank cut the value of the tenge by about 20% this year and is under pressure to do so again as the rouble remains low.
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(News report from Issue No. 227, published on April 15 2015)
APRIL 3 2015 (The Conway Bulletin) – Timur Kulibayev, one of Kazakhstan’s richest men and son-in-law of President Nursultan Nazarbayev, criticised the Central Bank’s handling of the growing economic fallout, a rare show of dissent by a senior member of the Kazakh elite.
At a business forum in Almaty, Mr Kulibayev said he was “not satisfied with the work of the Central Bank”, specifically with regards to the lack of liquidity.
“How can entrepreneurs get access to liquidity?” he said. “How can lending become more affordable? When we travel to the regions, these are the questions we are asked.”
The fallout from a slide in the value of the Russian rouble and a drop in the price of oil has hurt economies in Central Asia and the South Caucasus, piling pressure on its leaders and businesses. Mr Kulibayev owns Halyk Bank, one of Kazakhstan’s biggest banks.
Once feted as a leader–-in-waiting, Mr Kulibayev has become increasingly out-spoken and isolated.
The National Chamber of Entrepreneurs (NCE), a powerful organisation which he heads, has repeatedly criticised the Central Bank’s support for the national currency despite devaluation pressure.
Last month, Umut Shayakhmetova, the CEO of Halyk Bank also said in an interview that the Central Bank was hurting the economy by not allowing the currency to free-float.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 3 2015 (The Conway Bulletin) – The Uzbek sum dropped by 17% on the black market immediately after incumbent president Islam Karimov won a presidential election at the end of last month, data showed.
In Uzbekistan, the black market is vital to monitor as it most accurately tracks the value of the sum against the US dollar. Bank rates are fixed.
Uzmetronom, an independent news source, said the sum is trading at 4,200-4,500 sums per $1 on the black market, double the official rate. The website didn’t give any reasons why the sum had fallen so sharply after the election. Generally, though, the drop in remittance from Russia, the fall in energy prices and a fall in the value of the rouble have pressured the sum’s value.
Prices for basic goods are also rising, which is putting pressure on minimum wage workers.
Elections in both Uzbekistan and Kazakhstan this spring were supposed to bring about stability and reinforce trust. Instead, though, they may be bringing more instability.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 4 2015 (The Conway Bulletin) – Kazakhstan’s sovereign wealth fund has spent $8b, or 10% of its total, over the past nine months supporting the tenge currency against devaluation pressure, media reported quoting official statistics. The size of the drop gives a good indication on the severity of the economic downturn.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 5 2015 (The Conway Bulletin) – Kazakhstan will give car-makers 35b tenge ($188m) to help them survive the economic downturn, media reported quoting First Vice Minister for the Economy, Marat Kussainov. Kazakhstan’s car-makers have been hit hard by the sharp drop in the rouble because Russia was one of its biggest markets.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 6 2015 (The Conway Bulletin) – People in Kazakhstan, it appears, are still rushing to buy cheap Russian goods.
Official data showed that in February Kazakhs across the country bought 3.5 times more roubles than they did a year earlier.
In some areas, the rise was even bigger. In Mangistau, western Kazakhstan, the increase between February 2014 and February 2015 was nearly 19 times, Almaty the increase was 18 times and in Kyzylorda region of southern Kazakhstan the increase was nearly 35 times.
Russian goods have become far cheaper over the last few months because of the near 50% devaluation of the Russian rouble. Most Central Asian states have also devalued their own currencies but Kazakhstan has said that it will resist a sudden cut.
It knocked 20% off the value of its tenge currency last year and sees defending it as the best way to retain credibility.
Still, analysts have said that it is only a matter of time before Kazakhstan relents and cuts the tenge by up to 40%.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 1 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank said it had spent more than $1b of its reserves defending the value of the manat currency since it devalued by a third in mid-February. The admission will be an embarrassment for the Central Bank as the devaluation was meant to relieve pressure on the manat and protect reserves.
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(News report from Issue No. 225, published on April 12015)
MARCH 31 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank bought $11.4m worth of som to slow its devaluation, media reported, its third intervention in March. Kyrgyzstan, like other countries in the region, has been trying to manage a fall in the value of its currency.
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(News report from Issue No. 225, published on April 12015)
MARCH 27 2015 (The Conway Bulletin) – Banks in Azerbaijan are passing on costs triggered by the devaluation of the manat to their clients, the London-based Institute for War and Peace Reporting (IWPR) said.
The most vulnerable are people who took out loans in foreign currencies before the devaluation.
IWPR quoted local media which attributed two suicides to the devaluation and the sudden increased cost of repaying debt.
It also suggested that the commercial banks have been breaking the law by making people pay back loans at the new, weaker, exchange rate.
The IWPR quoted a Supreme Court judge saying that banks should continue to charge consumers the rate they took the loan out originally.
Experts have warned Azerbaijan that it needs to reduce consumers’ debt burdens to ensure its economic security.
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(News report from Issue No. 225, published on April 12015)
