Tag Archives: economy

Azerbaijan to ditch US dollar peg

>>Dollar being dropped to counter oil price slip>>

FEB. 15 2015 (The Conway Bulletin) — Azerbaijan plans to scrap its currency peg to the dollar to ease the impact of falling oil prices, Azerbaijani Central Bank chief, Elman Rustamov, said in an interview with the Financial Times.

The comments appeared to trigger a reaction on the street. Bulletin correspondents reported long queues forming outside exchange booths in Baku the day after the interview was published. People were anticipating another currency devaluation and were trying to exchange their Azerbaijani manat into US dollars.

Like other countries in the region, Azerbaijan has been trying to deal with the fallout from Russia’s tumbling rouble and the decline in oil prices.

One of the major side-effects of the economic turmoil has been an increase in inflation, as Mr Rustamov pointed out in the interview.

“It is critical to make some kind of corrections to fiscal and monetary policy,” he said. “We consider that we should transit to a more flexible exchange rate regime and gradually we will transit to an inflation-targeting regime.”

He didn’t say when the US dollar peg would be dropped but he did say that the new basket would hold more Euros, reflecting more accurately Azerbaijan’s trade make-up. Economists said they expected a gradual decline in the value of the manat of around 1% every month.

And people in Baku are becoming increasingly concerned about economic instability.

Mahammad Qasimli, 57, a school teacher said he was concerned hyperinflation from the mid-1990s may return.
“Every time when there is economic turmoil, the poor suffer the most,” he said.”
ENDS

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

Kazakhstan to go for early elections

>>Early vote is a tried and tested strategy>>

FEB. 14 2015 (The Conway Bulletin) — Kazakh president Nursultan Nazarbayev looks set to bring forward a presidential election by a year, a move designed to impose stability during a turbulent economic period.

The Assembly of the People of Kazakhstan asked parliament to bring forward a presidential election from 2016 to this spring.

“It is crucial to strengthen the economy and ensure the continuity of the current policy by holding an early election,” the assembly, a constitutional body headed by Mr Nazarbayev, said in a statement.

Since then the country’s biggest political party Nur Otan has voiced its support for an early election.

The dire economic situation has been a constant headache for the Kazakh leadership in the past few months, especially after the plunge in oil prices and the collapse of the Russian rouble.

The Kazakh elite view extending Mr Nazarbayev’s term in office by another five years as a way of imposing stability. Kazakhstan, also, has form with bringing elections forward. It brought an election in 2011 forward. Mr Nazarbayev won with 96% of the votes.

Experts were waiting for an announcement of this sort.

Kazakhstan’s political watchers had often ended conversations with Bulletin correspondents with: “We are waiting for an early election, to guarantee medium-term stability.”

It appears that their predictions have been borne out. It still remains to be seen, though, whether these elections will calm an increasingly turbulent political and economic environment.
ENDS

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

Georgia Central Bank increases rates

FEB. 11 2015 (The Conway Bulletin) — As expected, Georgia’s Central Bank increased its key interest rate by 50 basis points to 4.5% to try and dampen inflation. The Georgian lari has lost 8.5% of its value against the US dollar this year, increasing inflationary pressures.
ENDS

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

Georgia exports drop

FEB. 13 2015 (The Conway Bulletin) — Georgia’s foreign trade dropped by 9% in January compared to a year earlier, the national statistics office said. It blamed the Ukrainian civil war and the fall in the rouble for reducing demand for Georgia’s key exports — wine, water and citrus fruits.
ENDS

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

Armenia drops Turkey deal

>>Peace accords had been in front of parliament>>

FEB. 16 2015 (The Conway Bulletin) — Armenian president Serzh Sargsyan withdrew a series of peace accords relating to the country’s long-running dispute with Turkey.

The move is a major setback for the region as the Armenia-Turkey spat is a hindrance to improved ties and trade with Europe. The two countries’ argue about the alleged mass killings by Turkish Ottoman soldiers of Armenians who were fleeing their land around Lake Van in the east of Turkey.

Mr Sargsyan blamed Turkey for the cancellation.

“We were ready for a fully-fledged settlement in our relations with Turkey by ratifying these protocols, but we were also ready for failure,” media quoted him as saying.

The two countries signed declarations in 2009 to establish diplomatic relations and open a land border.

The problem is that neither the Turkish nor the Armenian parliaments have approved the deals. Nationalists on both sides have instead slowed progress and frustrated efforts.
ENDS

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

Russia slow on Kyrgyz projects

FEB. 16 2015 (The Conway Bulletin) — Kyrgyzstan’s energy minister, Kubanychbek Turdubayev, has accused Russia of working too slowly on upgrades to hydropower projects, eurasianet.org reported. Upgrades to the Kambar-Ata 1 dam and the Upper-Naryn Cascade were part of a 2012 deal that saw Moscow secure an extension to leases on military bases in Kyrgyzstan.
ENDS

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

Kazakh government spending slashed

FEB. 11 2015 (The Conway Bulletin) — Kazakh president Nursultan Nazarbayev said that all government spending, excluding social projects, would be cut by 10% to cope with the economic slowdown, media reported. He made a point, though, of denying that there was an economic crisis in Kazakhstan.
ENDS

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

Inflation likely to climb in Kyrgyzstan

>>Economy minister warns of more price rises>>

FEB. 17 2015 (The Conway Bulletin) — Kyrgyzstan’s economy minister, Temir Sariev, said that inflation could hit 13% this year, double the rate the government is aiming for.

Mr Sariev said that a combination of events had forced a large price jump in Kyrgyzstan — the falling Russian rouble, a slowdown in the economy and joining the Kremlin-steered Eurasian Economic Union.

In December annualised inflation measured over 10%, sharply up from the beginning of the year.

Last month the Kyrgyz Central Bank raised interest rates by 50 basis points to 11%, its highest rate since 2012.

But alongside the rouble devaluation and entry to the Eurasian Economic Union, Mr Sariev said that other problems had also weighed on the economy and had made the start of 2015 difficult.

“Seasonal water shortage has brought two big problems for us. Firstly, agricultural products produced in fewer amounts. Second, less energy produced. As a result, we had to buy it in Kazakhstan,” he said according to media reports.

The problem for the government is a weak economic outlook triggers resentment.

Opposition parties have already said that intend to hold a series of rallies in Bishkek this spring themed around what they described as a new economic crisis.
ENDS

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

Kyrgyz Central Bank spends heavily

FEB. 17 2015 (The Conway Bulletin) — Kyrgyzstan has spent around 10% of its currency reserves this year defending its currency from devaluing, media quoted the chairman of the Central Bank, Tolkunbek Abdygulov, as saying. The Kyrgyz som is closely linked to the Russian rouble and has devalued against the US dollar by around 20%.
ENDS

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

Berdy wants more clients

FEB. 8 2015 (The Conway Bulletin) — Perhaps feeling the pinch from falling energy prices, Turkmen leader Kurbanguly Berdymukhamedov wants Turkmenistan to increase the number of foreign clients it has for its gas, the official website turkmenistan.ru reported. Mr Berdmukhamedov has already increased Turkmenistan’s client case since taking over.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)