MAY 13 2014 (The Conway Bulletin) – Armenia’s Central Bank cut its key interest rate to 7.25% from 7.5% after data showed that inflation was within its target range, Reuters reported quoting the Central Bank. Annual inflation in April measured 4.4% within the 2.5% to 5.5% bracket.
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(News report from Issue No. 184, published on May 14 2014)
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.
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(News report from Issue No. 184, published on May 14 2014)
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.”
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(News report from Issue No. 184, published on May 14 2014)
MAY 13 2014 (The Conway Bulletin) – Kairat Kelimbetov, head of the Kazakh Central Bank, said he was concerned about the negative impact on Kazakhstan’s economy of sanctions on Russia. Mr Kelimbetov said 7% of Kazakhstan’s exports went to Russia and 36% of its imports came from Russia. Remittances are also important.
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(News report from Issue No. 184, published on May 14 2014)
MAY 10 2014 (The Conway Bulletin) – Azerbaijan cuts its key interest rate to a three year low last month because of a drop in inflation, Elman Rustamov, head of the Central Bank, said.
The Azerbaijani economy is generally on the up. There are some weak points, such as loose controls over consumer borrowing, but the Central Bank is managing to maintain growth rates as well as keeping inflation under control.
So confident has the Central Bank been feeling that on April 30 it cut its key interest rate to 4.25% from 4.75%. This was the first rate cut for 14 months and marks the lowest level since 2011.
Mr Rustamov explained the thinking behind the rate cut.
“Inflation in the country is at its lowest level. By the outcome of the first quarter, the inflation in the country stands at 2%,” he said.
“Interest rates need to be reduced. They should be reduced to such a level that they will be suitable both for the population and for businesses.”
Of course slowing inflation can also mask other problems. There may have been a slowdown in consumer demand and the economy may need a nudge.
But relaxing interest rates also presents a risk to Azerbaijan’s economy. Recent reports from international economists have all highlighted the threat from consumer borrowing. Moody’s said that consumer loans would grow by 20% this year, compared to 25% last year.
Cutting interest rates is hardly going to curb this trend.
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(News report from Issue No. 184, published on May 14 2014)
MAY 13 2014 (The Conway Bulletin) – TALCO, the aluminium plant that is at the centre of Tajikistan’s economy, cut production by 39.5% between January and March, media reported quoting the economy and trade ministry. TALCO had predicted a fall in aluminium production in February. It blamed the fall on a global crash in aluminium prices.
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(News report from Issue No. 184, published on May 14 2014)
MAY 3 2014 (The Conway Bulletin) — Kazakhstan’s economy minister, Yerbolat Dossayev, said the so-called People’s IPO would finally go ahead next month. The People’s IPO has been continually delayed. Mr Dossayev said the first round of sell offs of state assets would include subsidies of energy company Kazmunaigas and railway company Temir Zholy.
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(News report from Issue No. 183, published on May 7 2014)
MAY 2 2014 (The Conway Bulletin) — Inflation in Kyrgyzstan in the first three months of the year measured 7.1%, media quoted the Kyrgyz Central Bank as saying. The Central Bank said that a fall in the value of the Kyrgyz som, it fell in line with most currencies in Central Asia, had increased inflation above expectations.
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(News report from Issue No. 183, published on May 7 2014)
MAY 4 2014 (The Conway Bulletin) – Annualised inflation in Georgia in April was 3.4%, media quoted the Georgian statistics agency Geostat as saying. The main driver of inflation was food prices which measured nearly 8%. Prices in Georgia have increased since October last year, a relief for policy makers after years of deflation.
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(News report from Issue No. 183, published on May 7 2014)
ARSLANBOB/Kyrgyzstan, MAY 7 2014 (The Conway Bulletin) — In rural Kyrgyzstan, walnuts are important. Ilhon sighed as he leaned in and explained the significance of the walnut to the local economy of this small village in the Jalalabad region, south Kyrgyzstan.Surrounding the village is a 60,000 hectare walnut forest, providing a crop of about 1,000 tonnes each year.
In a country as poor as Kyrgyzstan, walnut crops can make up around a third of the average annual salary. The walnut season also provides a trickle-down effect on employment.
As well as the farmers, who lease the state-owned land to collect the walnut, other people are employed to shell walnuts and drivers to transport it to local markets. Most of the walnuts are then sent to Turkey, Iran and Iraq.
Still, it is just seasonal labour and when the season finishes its time to find fresh work.
Just like most of Kyrgyzstan, Ilhon and his brother look to Russia for help.
They head north to find casual labour, sending home most of what they earn. It’s tough and the pay isn’t great, but at least is does pay.
“Life is more difficult in winter,” Ilhon said of the drop in employment once the walnut season ends. “There is very little work around Arslanbob. Many of the men here go to Russia.”
There is another problem for Ilhon and others living and working in the walnut forests of south Kyrgyzstan. Since the collapse of the Soviet Union the forests have been increasingly poorly managed. These forests are the largest walnut forests in the world but they are also under threat.”
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(News report from Issue No. 183, published on May 7 2014)
