JUNE 24 2017 (The Bulletin) — The IMF released the fifth and final loan of $21.6m to Armenia, media reported, completing a promised $111.6m deal pledged in 2014. It said that Armenia’s economy was set to improve over the next few years after a tough period. It particular, the IMF praised Armenia’s spending prudence.
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(News report from Issue No. 334, published on June 26 2017)
JUNE 19 2017 (The Bulletin) — Falling oil prices have dented the Kazakh tenge, pushing it down to 320/$1, its lowest level since mid- February. This is a fall of 1.5% for the week, matching the fall of Brent oil. Brent oil was down at $47.37/barrel, down 1.6% for the week.
Overall, though, the Kazakh tenge is still trading up around 4% from where it started the year, although it has fallen back from highs hit in May. In May, the tenge traded at 310.6/$1 and had looked at one point as if it was going to push through the barrier.
There was little other currency moves this week, with the Azerbaijani manat staying unaffected by the fall in oil prices, and the Uzbek soum continuing its steady weekly 0.7% tick down.
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(News report from Issue No. 333, published on June 19 2017)
JUNE 14 2017 (The Bulletin) — Georgia’s Central Bank said that it was keeping its key interest rate at 7% because of stubbornly high inflation. It said that inflation in May was 6.6%, above its 4% annual target, although it also said that it expected the rate of price rises to drop in the second half of the year. Higher taxes and increased prices for imported goods have pushed up prices in Georgia this year. Georgia had slashed rates last year to 6.5% from 8% but started to raise it again in January.
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(News report from Issue No. 333, published on June 19 2017)
JUNE 14 2017 (The Bulletin) — Road accidents in Kazakhstan are denting its economic potential and will hold back China’s much- vaunted “One Belt, One Road” trade initiative to links East Asia with Europe via Central Asia, the Washington-based Centre for Strategic and International Studies said in a new report. It estimated that traffic accidents cost Kazakhstan $9b a year, the equivalent of 4% of GDP.
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(News report from Issue No. 333, published on June 19 2017)
JUNE 15 2017 (The Bulletin) — In a statement, the IMF said that Turkmenistan’s economy would grow at an uneven rate over the next few years with inflation remaining at “moderate” levels while the economy dealt with various external pressures linked to its over-reliance on gas exports as a revenue earner. It put both GDP growth and inflation at around 6% over the next couple of years.
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(News report from Issue No. 333, published on June 19 2017)
JUNE 6 2017 (The Bulletin) — Turkmenistan’s President Kurbanguly Berdymukhamedov ordered his government to scrap all subsidies on household utilities, immediately drawing accusations that he was losing control of the economy.
In a surprise statement, the presidential press service said that Mr Berdymukhamedov had ordered parliament to cut the Soviet-era subsidies because they were “ineffective”.
Quoting official news sources, news agencies said that Mr Berdymukhamedov had ordered his government to cancel all subsidies except “for the most needy”.
Turkmenistan’s economy has been strained for the past three years, ever since energy prices started to collapse, and commentators said that a lack of funds and not any root and branch change of economic strategy was behind the move.
Turkmenistan holds the world’s fourth largest gas reserves. The vast majority of its foreign earnings come from selling this gas, mainly to China. The drop in gas prices has hit this income stream hard and although Mr Berdymukhamedov has never admitted as such, it has dented the economy. In 2015, the Turkmen currency was devalued by a third.
At the start of this year, Turkmenistan accused Iran of not settling a debt that it said it was still and in the last few months Mr Berdymukhamedov has embarked on a series cabinet reshuffles and sackings that analysts said hinted at panic and frustration over the economic turmoil.
Under Mr Berdymukhamedov, state subsidies in Turkmenistan have gradually been eroded. The subsidies have their roots in the Soviet Union which made a point of giving electricity, heating and water virtually away for free.
Turkmenistan is trying to extend its energy customer base to India and Pakistan via the so-called TAPI pipeline, and also to negotiate a way to sell gas to Europe via the South Caucasus energy corridor.
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(News report from Issue No. 332, published on June 12 2017)
JUNE 6 2017 (The Bulletin) — Kazakhstan cut its key interest rate to 10.5% from 11% because it said that its currency had recovered. The Kazakh Central Bank has steadily cut its interest rate from a high of 17% at the start of 2016. It has said that the Kazakh economy is recovering. This year, the tenge has increased in value by 5% against the US dollar.
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(News report from Issue No. 332, published on June 12 2017)
JUNE 12 2017 (The Bulletin) — The Kyrgyz som dropped another 0.3% over the week, adding to a general downward trend since the end of April when it briefly threatened to break through the lower 67/$1 barrier.
On April 27, the Kyrgyz som hit 67.13/$1, a level not seen since the currency devaluation of 2015/16. Since then the som has fallen back to a level that analysts have said is a more natural range of between 68 and 69 per $1. It is now trading at 1.25% higher than at the start of the year.
Elsewhere, the Uzbek soum continued its slow downward trajectory and the Kazakh tenge moved closer to falling through the 316/$1 barrier, a level not seen since the beginning of May. It has generally tracked down with oil.
JUNE 8 2017 (The Bulletin) — Quitting the Extractive Industries Transparency Initiative (EITI) has not dented Azerbaijan’s ability to attract international investments, Azerbaijan’s deputy economy minister, Sahil Babayev, said during a conference. Azerbaijan quit the EITI earlier this year after a row over media freedom and human rights. Analysts had said that quitting the transparency group would hit Azerbaijan’s ability to pull in major loans. The EBRD and other lenders, though, have signalled that they are still prepared to lend to Azerbaijan on certain projects.
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(News report from Issue No. 332, published on June 12 2017)
JUNE 6 2017 (The Bulletin) — Exports from Armenia have increased by 16.1% in the first four month of the year compared to the same period in 2016, media reported quoting the national statistics service. Russia was still the biggest trade partner and China the second biggest. Like the rest of the region, Armenia has been shrugging off an economic malaise triggered by a fall in oil prices and a recession in Russia that has lingered from 2014.
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(News report from Issue No. 332, published on June 12 2017)
