MARCH 25 2016 (The Conway Bulletin) – The Georgian Central Bank said the dollarisation of Georgia’s economy continued to rise in February, as US dollar deposits grew to 68.4% of the total, the highest level since October 2010. A high dollarisation of deposits suggests that bank customers’ trust in the local currency in waning.
ENDS
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(News report from Issue No. 274, published on April 1 2016)
MARCH 31 2016 (The Conway Bulletin) – Data on economic activity in Azerbaijan showed a sharp slowdown after the government abandoned the currency peg to the US dollar in December, a move that triggered a 30% drop in the value of the manat currency.
Azerbaijan imported markedly less wheat and cars, both good indicators of domestic demand.
In January, imports of wheat fell by 55.8% to 47.95m tonnes, as businesses found it increasingly more difficult to pay for their orders in foreign currency.
Total car imports in January and February this year were just 821 units, barely a tenth of the total during the same period in 2015.
Also, Azerbaijan’s State Statistics Committee said that the country had generated 6.4% less power in the first two months of the year compared to the same period last year. Thermal power production, Azerbaijan’s main source of electricity, was down nearly 8%, suggesting that demand from consumers and businesses had dropped — another indicator of the sharp economic downturn.
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(News report from Issue No. 274, published on April 1 2016)
MARCH 30 2016 (The Conway Bulletin) – The Kyrgyz Central Bank continues to buy US dollars in the currency market because demand for foreign currency is shrinking and, the Bank’s chief Tolkunbek Abdygulov told a press conference, people and businesses need improved som liquidity. The Central Bank bought around $62m in March.
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(News report from Issue No. 274, published on April 1 2016)
MARCH 21 2016 (The Conway Bulletin) – Remittances to Georgia fell again in February to $79.9m, a 2.6% decline on the year. Notably, money transfers from Russia and Greece continued to decline sharply while remittances from Italy, the US and Israel showed positive growth. As transfers from Greece have dramatically declined to around $8.5- $9.5m/month, Italy now ranks second behind Russia in the ranking of countries sending money to Georgia.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 24 2016 (The Conway Bulletin) – Azerbaijan’s finance ministry issued a $1b 10-year Eurobond to fund the Southern Gas Corridor company which is building an energy transport route between the Caspian Sea and Europe.
The initial yield on the debt was 7%.
Analysts have said that the rare debt issue for such a high-profile
Azerbaijani energy project is another indication of just how heavily the economic downturn has impacted finances.
The Southern Gas Corridor is a state-owned company in charge of the design and construction of pipelines that will send gas from the Caspian Sea to Europe by 2019. These include TANAP, which will run across Turkey and TAP, which will link Greece to Italy.
The EU considers the project to be a priority for its energy security strategy as it reduces its reliance on Russia for gas. Azerbaijan is hoping to give its gas sector a major lift with the EU as a key client.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 22 2016 (The Conway Bulletin) – International ratings agency Moody’s downgraded Armenia’s government bonds to B1 from Ba3, as the economic crisis continues to bite. Moody’s said Armenia continues to be vulnerable to external factors, such as “declining remittances from Russia that have not yet bottomed out,” the agency said in a press statement. Moody’s also said the downgrade is linked to the worsening debt/GDP ratio.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 21 2016 (The Conway Bulletin) – The Armenian government wants to reform its stock exchange to include currencies and other forms of financial trade. In an interview with Reuters, the director of NASDAQ OMX, Konstantin Saroyan, said: “We are concerned that there are no currency operations on the stock exchange and we are trying to change our business model.” Mr Saroyan also said demand for US dollars has declined due to the economic downturn.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 18 2016 (The Conway Bulletin) – Azerbaijan’s President Ilham Aliyev signed a decree to set SOFAZ’s spending at 10.7b manats ($6.5m) and revenues at 4.6b manats ($2.8b) for 2016, meaning that the fund will post a loss for the second consecutive year. Assets held by SOFAZ, Azerbaijan’s sovereign wealth fund, dropped by 9.5% in 2015 to $33.6b because it paid around 8b manats ($5.16b) into the state budget to help the country weather the economic downturn.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 16 2016 (The Conway Bulletin) – Georgia’s Central Bank picked Koba Gvenetadze, a former IMF banker, to be its chief, replacing Giorgi Kadagidze whose term finished in February. The following day, President Giorgi Margvelashvili approved Mr Gvenetadze’s 7-year term at the Bank. Georgia’s economy has been under increased pressure from the falling value of the lari and rising inflation linked to a fall in oil prices and recession in Russia.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 14 2016 (The Conway Bulletin) – Kazakhstan’s Central Bank left interest rates unchanged at 17% to give the tenge currency extra support. At its monthly policy-setting meeting, the Central Bank said that supporting the currency was a higher priority than reducing the cost of borrowing. Analysts had argued that the interest rate was set too high.
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(News report from Issue No. 272, published on March 18 2016)
