FEB. 6 2015 (The Conway Bulletin) — Kazakhstan’s net gold and foreign currency reserves increased to $28.2b in January from $28b in December and $24b from a year earlier, highlighting its ability to fight downward pressure on its tenge currency. Kazakhs worry about another devaluation.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 218, published on Feb. 11 2015)
FEB. 9 2015 (The Conway Bulletin) — A handful of residents in Almaty staged another protest against the falling value of the Kazakh tenge. According to a Radio Free Europe report the protesters said they had taken out mortgages when $1 equalled 107 tenge. Now $1 equalled 186 tenge. Protests are rare in Kazakhstan but pressure on the tenge has angered people.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 218, published on Feb. 11 2015)
JAN. 30 2015 (The Conway Bulletin) — Perhaps even the phlegmatic Turkmen president Kurbanguly Berdymukhamedov is beginning to become unnerved by the sudden drop in energy prices. Media reported that he held an unprecedented TV broadcast in which he explained to ordinary Turkmens how he had been forced to devalue the manat currency (Jan. 30).
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 217, published on Feb. 4 2015)
>>Armenia’s economy is closely linked to Russia’s fortunes>>
JAN. 30 2015 (The Conway Bulletin) — Ratings agencies Fitch and Moody’s downgraded Armenia’s bond ratings to negative from stable, another sign that the Armenian economy is in for a turbulent few months.
Fitch said that it expected Armenia’s economy to slip into a recession this year and the deficit to widen.
“Remittances amount to about 15% of GDP and fell by about 30% during the last months of 2014 as 90% of the total come from Russia,” it said in a research note.
Armenia has been hit by the drop in the Russian rouble and the turmoil in Russia’s economy, triggered by a fall in oil prices and sanctions imposed by the West after the Kremlin’s intervention in Ukraine.
Over the past seven months, Armenia’s dram currency has fallen by nearly 20% against the US dollar despite a steady increase in interest rates.
Of course, it’s not just Armenia which is exposed to the drop in Russia’s economy and currency. The rest of Central Asia and the South Caucasus have also been badly hit.
Armenia, though, is particularly closely linked. It is desperately hoping that there will be some improvement in Russia’s economy.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 217, published on Feb. 4 2015)
>>Worries about devaluation drive Kazakhs to the rouble>>
FEB. 4 2015 (The Conway Bulletin) — People in Kazakhstan have been buying roubles at surprising rates over the past couple of months.
Exchange bureaus data shows that the demand for the Russian currency increased steadily in November and skyrocketed in December despite the rouble losing value against the Kazakh tenge (Jan. 28).
No official reason has been given for the rise in rouble demand but there are several plausible reasons. A Bulletin correspondent in Almaty said many Kazakhs see the ailing rouble as a cheap currency for cross-border shopping.
Of course, Kazakhs may also be speculating that the rouble is valued too cheaply at the moment and that it will rise in value. This is almost certainly true of its value against the Kazakh tenge.
The Kazakh Central Bank has vowed to avoid another devaluation of the tenge — it cut the value of its currency by 20% last year — but the market, and most people on the streets think that another sudden devaluation is inevitable.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 217, published on Feb. 4 2015)
JAN. 30 2015 (The Conway Bulletin) — Georgia’s Central Bank chief, Georgy Kadagidze, said he would tighten monetary policy next week after another drop in the value of its lari currency. Mr Kadagidze has said that he would not spend the bank’s reserves heavily to prop up the lari which has lost around 15% of its value since November.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 217, published on Feb. 4 2015)
>>Pressure building on the C.Bank as lari hits 10-year lows>>
JAN. 27 2015 (The Conway Bulletin) — Georgia’s economic policymakers have said that they will not intervene to halt the fall in the value of the lari currency.
Pressure has been building on the Central Bank as the lari has lost 7% of its value against the US dollar this year, adding to a 12% loss at the end of 2014.
But economy minister, Giorgi Kadagidze, said that the Central Bank would not start spending its reserves to prop up the currency.
The lari is now trading at over 2 to the US dollar. This is the cheapest that the lari has been for over a decade.
The big worry for Georgian economic decision makers is that inflation will start creeping up.
At its last meeting on interest rates in December, the Central Bank elected to keep the key rate unchanged. The Central Bank chief, Giorgi Kadagidze, said that if there was any hint of inflationary pressure appearing he would raise interest rates.
Georgia had been less affected by the turmoil in Russia’s economy and the drop in oil prices over the past six months. Clearly the poor economic data is beginning to catch up with it.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 216, published on Jan. 28 2015)
JAN. 23 2015 (The Conway Bulletin) — Nurlan Smagulov, head of the Astana Motors car dealer and an influential businessman, stepped into the debate over the Kazakh tenge. At a press conference, he said policymakers should not devalue the currency for the second time as this would undermine its credibility and knock consumer spending.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 216, published on Jan. 28 2015)
>>Nazarbayev summons his chief economic lieutenant for talks>>
JAN. 16 2015 (The Conway Bulletin) — Kazakh president Nursultan
Nazarbayev summoned the head of Samruk Kazyna, the country’s
sovereign wealth fund, for crisis talks over the falling price of
oil and the drop in the value of the Russian rouble.
The meeting highlights just how worried Mr Nazarbayev and his
senior ministers are about the recent economic downturn. Most major
financial institutions now expect the Kazakh economy to grow by
only 1.5% this year, a relatively small amount.
When Mr Nazarbayev announced last year a new economic policy, he
aimed to enter the New Year with a Keynesian industrial programme
that would have injected billions into construction projects and
subsidies.
Currency depreciations and oil markets, however, have shattered the
plan.
After his meeting with Mr Nazarbayev, Umirzak Shukeyev, the Samruk
Kazyna chief, said: “The goal is to reduce administrative costs by
20% and investment engagements by 18%.”
This, then, is the opposite of what had been promised.
The most feared buzzwords on the streets from Almaty to Atyrau are
devaluation and austerity. Several consulting and investment firms
have forecast a devaluation in the first quarter. The research
branch of Kazakhstan’s second largest lender, Halyk Bank, told
Bloomberg that they deem a depreciation of the tenge as inevitable.
The leader of the National Business Association, Rakhim Oshakbayev
publicly asked the government to protect private companies from the
risk of devaluation (Jan. 20).
In Kazakhstan, the government is expected to act to reverse the
economic downturn but with no significant increase in hydrocarbon
and commodity output, its only option is to dig into the reserves
of the sovereign fund and hope for the best, or so it often seems.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 215, published on Jan. 21 2015)
>>Remittances from Russia fall>>
JAN. 21 2015 (The Conway Bulletin) — As the Russian rouble falls in value, families of Azerbaijani migrants working in Russia face an increasingly frustrating economic headache.
The Azerbaijani manat has doubled in value against the Russian rouble in the last five months ago. This means that the Russian roubles sent back by Azerbaijani workers to their families are now worth half.
Unofficially around 2m migrants from Azerbaijan work in Russia. They send home about $2-3b a year, Azerbaijani economists have estimated.
Gulsara Qurbanova, a mother of three said she and her children live on money her husband sends from Russia. “Before he used to send us around 35,000 roubles a month and we received around 800 manat when we converted it,” she said. Her voice was strained with worry.
“Now it’s about half that. Obviously we face financial hardship because of it.”
The drop in the value of the rouble is hitting exports from Azerbaijan to Russia too.
Fuad Garibov from Khachmaz, a northern town in Azerbaijan said he has decided to hold on to a consignment of dates that he had intend to sell in Russia. “If I sell it now, it’s obvious that I will lose, he said.
“I hope that something will change soon.”
Azerbaijan’s economy is also reliant on oil and gas sales. With energy prices halving over the last six months, the Azerbaijani economy, which once looked so buoyant, is looking strained.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 215, published on Jan. 21 2015)
