Tag Archives: economy

IFC and ADB issue lari-denominated bonds

FEB. 25 2015 (The Conway Bulletin) — Two major inter-governmental financial organisations — the Asian Development Bank and the International Finance Corporation (IFC) — have issued lari-denominated bonds for the first time.

The IFC, which is part of the World Bank, issued a 30m lari ($13.2m) bond with an initial yield of 6.924% and the Asian Development Bank issued a 100m lari ($44.2m) bond with a floating yield.

The idea behind the issues is to help boost the Georgian capital markets and to support small businesses.

In a statement, Pierre Van Peteghem, treasury of the Asian Development Bank said: “This bond — the largest by a foreign issuer — will provide a key market benchmark and could encourage more borrowers, both domestic and foreign, to tap the Georgian bond market.”

The ADB explained that profit from the bonds would be given to TBC Bank to lend out to small and medium sized enterprises.

And they need all the help they can get at the moment.

Like its neighbours in the South Caucasus, Georgia is struggling to deal with the fallout from the economic turbulence in Russia. Its lari currency is losing value, making lari-denominated bonds a risky investment.

Still, the drive by the IFC and the ADB to sell lari denominated bonds is a boost for the ailing currency. It also shows confidence in its future. It remains to be seen if the market also holds the same confidence in the lari currency.
ENDS
Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Azerbaijani devaluation angers people

FEB. 21 2015 (The Conway Bulletin) — Azerbaijan’s Central Bank slashed the value of its manat currency by a third overnight, a sudden move that took businesses and ordinary Azerbaijanis by surprise.

Previously Azerbaijani officials had said that they would release the manat from its dollar peg, suggesting only a gradual devaluation to adjust to a sharp decline in the Russian rouble.

They have now justified the sudden devaluation by saying that they had little choice but to act in the face of a collapse in oil prices and economic turbulence in Russia.

“This decision was made in order to support diversification of Azerbaijan’s economy, strengthen its international compatibility and export potential as well as to provide balance of payments sustainability,” the Central Bank said in a statement.

On the streets of Azerbaijan’s towns, though, the devaluation was less generously viewed.

Veli, 29, a small business owner in Guba, a northern city, told a Bulletin correspondent that he was in shock.
“I believed the government. I kept my savings in the manat,” he said. “I lost third of my savings. It’s painful. It’s theft by the government.”

He said that he had no choice but to increase the price of the electronic goods he was selling in his shop — fuelling rising inflation.

Sahiba, a mother of two young children living in the city of Gazakh on the western border with Georgia echoed these sentiments. Her husband is a government official but has had his pay cut already this year.

“We’ve got a mortgage,” she said. “I don’t know what we’ll do.”

ENDS
Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Industrial output in Kazakhstan drops

FEB. 19 2015 (The Conway Bulletin) — Industrial activity in Kazakhstan will decline by 0.3% this year to its worst level in 17 years, media reported quoting the economy ministry. The drop in industrial activity is symptomatic of the overall slowdown in Kazakhstan’s economy in the past 12 months.
ENDS
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(News report from Issue No. 220, published on Feb. 25 2015)

Tajik migrants head home

FEB. 22 2015 (The Conway Bulletin) — The falling rouble has persuaded up to half of St Petersburg’s Central Asian casual work force to return home, the AFP news agency reported.

St Petersburg’s deputy governor, Igor Albin, reportedly said that 50% of the snow sweepers, normally from Central Asia, had left the city.

AFP’s correspondent in St Petersburg directly quoted the head of a snow sweeping company who gave similar insight, although with a lower percentage heading home.

“Almost 30% of the workers who left to spend New Year’s as usual with their families in Uzbekistan or Tajikistan have not come back,” he said.

Uzbekistan, Kyrgyzstan and Tajikistan are most vulnerable to this trend. Tajikistan holds the dubious position as the country that is most reliant on remittances. These make up about 50% of its total GDP.

The Tajik Central Bank has tried to prop up its currency against the falling Russian rouble although it has warned that inflation is creeping up.

In Dushanbe, an immigration official told AFP that only half the number of Tajiks were leaving to take jobs abroad this year, compared to the same period in 2013.
ENDS
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(News report from Issue No. 220, published on Feb. 25 2015)

Uzbekistan boosts gold production

FEB. 18 2015 (The Conway Bulletin) — Uzbekistan increased gold production in 2014 by 4.1% to 102 tonnes, media reported quoting the US Geological Survey. Gold is an important source of foreign cash for the Uzbek government. Uzbekistan is now the seventh largest gold producer in the world.
ENDS
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(News report from Issue No. 220, published on Feb. 25 2015

Georgia growth rate is halved

FEB. 23 2015 (The Conway Bulletin) — In an interview with Reuters news agency, Georgia’s economy minister Georgy Kvirikasvili said he may halve the country’s projected economic growth to 2.5% this year. Mr Kvirikasvili said the side-effects of Ukraine’s civil war and the sanctions on Russia had hurt Georgia’s economy.
ENDS
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(News report from Issue No. 220, published on Feb. 25 2015)

Georgia CBank props up lari

FEB. 24 2015 (The Conway Bulletin) — In an effort to stop its currency from sliding further, the Georgian Central Bank said it had sold another $40m of its reserves. This is the third time this month it has sold US dollar reserves to prop up its lari currency.
ENDS
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(News report from Issue No. 220, published on Feb. 25 2015)

Armenia CBank reduces growth estimate

FEB. 23 2015 (The Conway Bulletin) — Armenia’s Central Bank has said that economic growth this year could virtually stagnate at a mere 0.4%, media reported. This figure is at the lower end of its updated estimate which blamed a poor Russian economy for the general slowdown in Armenia’s own economic prospects.
ENDS
Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Gradual devaluation for tenge

FEB. 11 2015 (The Conway Bulletin) — Kairat Kelimbetov, head of the Kazakh Central Bank, hinted for the first time that he was prepared to allow a gradual devaluation of the tenge. He told Russian media: “We will not allow a one-off shock devaluation and instead will work within the framework of a smooth and flexible exchange rate mechanism.”
ENDS

(News report from Issue No. 219, published on Feb. 18 2015)

Top TALCO manager sacked

FEB. 13 2015 (The Conway Bulletin) — Tajikistan’s president Emomali Rakhmon sacked the managing-director at TALCO, the company that runs its aluminium smelter, media reported. No official reason was given for sacking Sadriddin Sharipov from TALCO which generates around 70% of Tajikistan’s foreign earnings.

ENDS

(News report from Issue No. 219, published on Feb. 18 2015)