JAN. 15 2015 (The Conway Bulletin) — The market may have priced in
another devaluation but Kairat Kelimbetov, head of the Kazakh
Central Bank, said he would not allow fluctuations in the currency.
Mr Kelimbetov has been saying for months that despite the falling
Russian rouble and a drop in oil prices, the Kazakh tenge would not
devalue.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 215, published on Jan. 21 2015)
>>Tajik CBank can’t afford aggressive defence of somoni again>>
JAN. 20 2015 (The Conway Bulletin) — Russia’s rouble crisis is pushing Tajikistan to the brink of bankruptcy. The Tajik Central Bank has said that it spent half the country’s reserves last year trying to prop up its currency against the falling rouble.
These are worrying times for Central Asia’s governments. A combination of falling oil prices and Russia’s economic turmoil is pressuring their own finances.
Remittances from Russia have fallen sharply in value over the past six months or so, undermining economies in Tajikistan and Kyrgyzstan especially.
Central Banks have been spending heavily to try to bolster their currencies against a falling Russian rouble but this has proved difficult.
Despite spending half its national reserves — there is now less than $500m left in the Central Bank’s reserves — the value of the Tajik somoni has still fallen over 10% against the US dollar. Inflation has also risen.
All the signs are that 2015 will be complicated too. What the Tajik government can’t afford, though, is another costly battle to defend the somoni.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 215, published on Jan. 21 2015)
JAN. 13 2015 (The Conway Bulletin) — Azerbaijan’s Central Bank said it spent $1.13b in December supporting its national currency — the manat — counter a falling Russian rouble and a drop in global oil prices. This represents about 8% of its total currency reserves.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 214, published on Jan. 14 2015)
JAN. 13 2015 (The Conway Bulletin) — Car imports to Kazakhstan from Russia have jumped in the past two months to 2,859 from 2,005 during the same period in 2013, Kazakh media reported quoting government officials. The upturn is linked to the currency discrepancies. The rouble has nose-dived but the Kazakh Central Bank has kept the tenge strong.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 214, published on Jan. 14 2015)
JAN. 13 2015 (The Conway Bulletin) — Kyrgyzstan’s currency reserves dropped by 12.5% in 2014 to just under $2b, the head of the Central Bank, Tolkubek Abdygulov, was quoted by media as saying. The drop was due to Central Bank interventions to try to prop up the Kyrgyz som, under pressure from a falling Russian rouble.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 214, published on Jan. 14 2015)
>>Russian rate rise triggers Armenian reaction>>
DEC. 23 2014, (The Conway Bulletin) — Armenia’s Central Bank raised its key interest rate to 8.5% from 6.75%, a move widely interpreted as an attempt to keep up with its Russian counterpart.
Inflation in Armenia is creeping up, mainly because of anticipated price pressure triggered by joining the
Kremlin-led Eurasian Economic Union which ties the Armenian economy even more closely into the Russian economy.
In November Armenia’s annualised inflation was 2.6% up from 2.2% in October and economists have said that this trend is likely to accelerate.
But the Russian Central Bank’s defence of its rouble currency is also giving its allies a headache.
In mid-December to stop a run on the rouble, the Russian Central Bank raised interest rates overnight to 17% from 10.5%. This has forced its closest allies to follow.
Armenia is in a tight spot.
It is so reliant on Russia that it has become a virtual satellite state, and more so after it signed a deal to enter the Eurasian Economic Union.
Adapting to the Kremlin’s Eurasian Economic Union and the impact of this political-economic move will dominate Armenia in 2015.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 213, published on Jan. 7 2015)
JAN. 1 2015, (The Conway Bulletin) — Turkmenistan devalued its currency by 19% overnight to try and counter a slump in oil prices.
This was the first manat devaluation in seven years, underlining just how heavily former Soviet states have been hit by the drop in the price of oil and subsequent drop in the value of the Russian rouble.
Bloomberg News quoted data from the Turkmen Central Bank that showed the manat trading at 3.5 to the dollar, a drop from 2.85.
Oil prices are now around $50/barrel, half the price they were trading for earlier in 2014.
Turkmenistan’s economy has boomed over the past few years thanks mainly to gas sales. The price of gas is closely linked to the price of oil. Its main client is China but Europe has also been looking to woo Turkmenistan and so have states in the Gulf and the Indian Subcontinent.
The problem for Turkmenistan is most of its gas contracts are pegged to global markets.
Turkmen president Kurbanguly Berdymukhamedov promised plenty of new major infrastructure projects in 2015.
With falling revenues from oil and gas sales, these may now be at risk.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 213, published on Jan. 7 2015)
DEC. 22 2014, (The Conway Bulletin) — In a televised address, Kazakh president Nursultan Nazarbayev said he had a plan to counter falling oil prices even if they fell below $40/barrel. Oil prices have now halved from their height last summer to around $50/barrel. Kazakhstan has been building up a reserve of cash to deal with a slump.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 213, published on Jan. 7 2015)
DEC. 5 2014 (The Conway Bulletin) – The Georgian lari and the Armenian dram have fallen sharply against the US dollar. The lari hit its lowest level for 10 years and the dram its lowest level since 2006. The root cause of the collapse of the currencies is the weakening of Russia’s economy because of a collapse in oil prices and Western- imposed sanctions.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 212, published on Dec. 10 2014)
NOV. 28 2014 (The Conway Bulletin) – The depreciation of the Russian rouble has hit Kazakhstan’s energy sector, media reported.
Kazakh media said Samruk-Energo, the state-owned energy company, had cancelled rouble-denominated contracts with Russian clients.
“We have suspended power supplies over the lingering Russia’s currency devaluation. Supplies are no longer economically viable for Kazakhstan-based power plants. Loss of the markets is an important issue,” media quoted Almasadam Satkaliyev, head of Samruk-Energo, as saying.
This is important as it shows how Kazakh industry is beginning to lose out from a depreciating rouble. It’s an issue that could threaten to upset otherwise close relations between the two neighbours.
Kazakhstan has signed up to the Russia-led Eurasian Economic Union and has a host of other friendly treaties in place.
The problem is that the Kazakh Central Bank has pledged not to devalue its currency after knocking 20% off its value earlier this year. This means that Kazakhstan will have to look elsewhere to sell its power or accept a vastly reduced price.
Mr Satkaliyev also said that Kazakhstan was looking to replace coal supply contracts with Russian clients.
“Russia’s economy is not ready to import Kazakhstan’s coals at higher prices. Russia has adopted a program to replace Kazakhstan’s coal,” he said.
“A second factor is the continuing devaluation of the Russian rouble. All the contracts rely on the Russian rouble; therefore for the Kazakh side it is of great importance to ensure economic viability of supplies.”
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 211, published on Dec. 3 2014)
