Tag Archives: currency

Sliding rouble pressures Kazakhstan’s tenge

OCT. 31 2014 (The Conway Bulletin) – A 40% drop in the value of the rouble this year is placing extreme pressure on Russia’s main trade partners, including Kazakhstan, experts have said.

Banking analysts have said that it is increasingly likely the Kazakh Central Bank will have to follow the rouble and devalue its own tenge currency for the second time this year.

The Tengrinews website quoted Raimbek Batalov, director at Raimbek Group, as saying that the fluctuating value of the tenge was hurting exporters. Kazakh goods are now far too expensive for their main export market — Russia.

And reports have emerged from across Kazakhstan that people are rushing to banks to sell their tenge before an imminent devaluation.

Falling oil prices and sanctions imposed by the West have pressured the rouble while the Kazakh Central Bank has insisted on keeping the tenge pegged to the US dollar since its 20% devaluation in February.

Luca Anceschi, professor of Central Asian Studies at the University of Glasgow explained that the rouble was introduced in 1993 to reduce Kazakhstan’s dependency on the rouble. Instead, he said, the opposite has happened.

“The policies pursued since 1993, if anything, have de facto re-established such dependency,” he said.

Increased economic integration with the Eurasian Economic Union gives Kazakh President Nursultan Nazarbayev even less room to manoeuvre.

A second devaluation, to keep pace with Russia’s currency slide, must be approaching fast despite the Central Bank’s denials.

ENDS

(News report from Issue No. 207, published on Nov. 5 2014)

Kazakhstan to issue dollar denominated bond

SEPT. 25 2014 (The Conway Bulletin) – Kazakhstan will issue a US dollar denominated bond later this year, its first since 2000, Reuters reported. Government officials have launched a roadshow to drum up support for the debt issue. These are difficult times, though, because of the knock-on effect of sanctions on Russia.

ENDS

(News report from Issue No. 202, published on Oct. 1 2014)

Banks to keep assets in Kazakh tenge

SEPT. 9 2014 (The Conway Bulletin) – Kazakhstan’s Central Bank said that it would ban domestic banks from keeping most of its cash overseas from next year.

The announcement is another move aimed at strengthening the local banking sector.

Kairat Kelimbetov, the Central Bank chief, said that banks currently kept most of their assets in foreign currency, undermining the tenge.

“We have taken appropriate action. Firstly, limiting the ability to work with derivative financial instruments at 30 per cent on the balance. Roughly speaking, not allowing to play with currency derivatives,” he said, according to the media.

One of the biggest challenges facing the Kazakh Central Bank currently is trying to stop a slide in the value of the tenge. It has already had to devalue the national currency by 20% earlier this year and has come under sustained pressure to devalue again.

ENDS

(News report from Issue No. 199, published on Sept. 10 2014)

Petrol supplies drop in Kazakhstan

AUG. 28 2014 (The Conway Bulletin) – Reports from the regions said that queues up to a kilometre-long have been forming outside petrol stations as motorist try to re-fuel their cars.

In the northern city of Uralsk only four of 11 petrol stations were serving motorists without vouchers.

A combination of low refining capacity while upgrades are made; the devaluation of the tenge currency, which has made imports more expensive; restrictions on the quantity of imports have reduced petrol supplies.

Officials have said that they are working to bring the situation under control but frustrations threaten to bubble over.

Kazakh President Nursultan Nazrbayev relies, to some degree, on the people becoming increasingly rich and comfortable for his popularity. If this starts to reduce, or become visibly impaired, his popularity may drop.

ENDS

(News report from Issue No. 198, published on Sept. 3 2014)

Petrol shortages have worsened in Kazakhstan over the past few months.

Inflation rising in Kyrgyzstan

JUNE 16 2014 (The Conway Bulletin) – Inflation in Kyrgyzstan will almost certainly double this year to around 8%, Tolkun Abdygulov, head of the Central Bank, said. Increasing inflation could agitate people in Kyrgyzstan. Mr Abdygulov also said that the Central Bank had spent $198m trying to prop up the Kyrgyz national currency.

ENDS

(News report from Issue No. 189, published on June 18 2014)

No devaluation says Kazakh Central Bank Chief

JUNE 2 2014 (The Conway Bulletin) -Rumours of another devaluation of the tenge triggered a spike in demand for dollars, media reported. The buying of dollars forced Kazakh Central Bank chief Kairat Kelimbetov to step in and deny that another tenge devaluation was planned. Kazakhstan devalued the tenge by 20% earlier this year.

ENDS

(News report from Issue No. 187, published on JUNE 4 2014)

Kazakhstan wins banknote of the year, again

MAY 8 2014 (The Conway Bulletin) – For the third year in a row, Kazakhstan’s Central Bank won the award for the best-designed new banknote. This year a new yellow and brown 1,000 tenge note commemorating the historical warrior leader Kultegin won the prize. Kazakhstan views the award as a way of boosting its international status.

ENDS

(News report from Issue No. 184, published on May 14 2014)

IMF assesses Kazakh economy

MAY 7 2014 (The Conway Bulletin) – The Kazakh Central Bank should relax its monetary policy and allow the tenge to appreciate, media quoted the IMF as saying after a field trip to Kazakhstan.

It said that the tenge was now undervalued and that the narrow band that the Central Bank anchors the currency in should be widened.

In February, the Kazakh Central Bank suddenly cut the value of the tenge by 20%, a move the IMF said could trigger inflationary pressure.

The assessment is hardly a ringing endorsement of the Kazakh Central Bank and its policies.

It appears that Kazakh consumers, also, agree with the IMF. Fresh data showed that since December the amount of savings held in US dollars has increased by around a third. People are clearly nervous of the tenge.

The IMF also highlighted a much talked about weakness in the Kazakh economy; the high proportion of non-performing loans. Roughly a third of all loans are considered non- performing and this, the IMF said, had to be cut.

A senior manager in the currency sector in Almaty said that both relaxing the band that the tenge was held in and cutting the proportion of non-performing loans was wishful thinking by the IMF.

“Such a decision would mean creating panic in the society,” he said on condition of anonymity of the IMF’s proposal to relax the currency band.

“The government wants the opposite. Everything has to be calm and quiet. Increasing the range would enhance speculative moves in the currency market.”

ENDS

(News report from Issue No. 184, published on May 14 2014)

The Tajik somoni slips against the dollar

APRIL 28 2014 (The Conway Bulletin) — Tajikistan’s somoni currency fell against the dollar, media reported, continuing its general depreciation. Like other currencies across the region, the somoni has been under pressure because of a decline in the value of the Russian rouble. Kazakhstan devalued its tenge by 20% in February.

(News report from Issue No. 182, published on April 30 2014)

Fitch says Kazakhstan’s bad loans will increase

APRIL 1 2014 (The Conway Bulletin) — The 20% devaluation of the tenge earlier this year will trigger an increase in bad debt, Roman Kornev, director of financial institutions at Fitch Ratings said. The Kazakh government wants to reduce the amount of non-performing loans on banks’ portfolios.

(News report from Issue No. 178, published on April 2 2014)