DEC. 15 2015 (The Conway Bulletin) – Tajikistan and China completed a currency swap deal which they had arranged earlier in the year. Under the deal, China will give Tajikistan 3b yuan (around $470m) in exchange for the equivalent in Tajik somoni. The two sides said the deal would facilitate bilateral trade but it is also a way for China to give Tajikistan some hard currency.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 17 2015 (The Conway Bulletin) – Remittances from Russia to Tajikistan were 73.5% lower in the third quarter of this year compared to the same period in 2014, data from the Russian Central Bank showed. The data shows just how heavily a recession in Russia is impacting people in Central Asia.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 15 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank released data that showed a massive drop in its current account surplus for January-September 2015 because of sustained low oil prices.
For the first three quarters of the year, the trade balance totalled $240.5m, down from $9.1b in the same period last year, showing the impact of low oil prices and currency depreciation.
Azerbaijan has run a current account surplus since 2005.
For the Jan.-Sept. period, the Central Bank used an average price of oil of $51/barrel, while last year the price level was set at $102/barrel. The Azerbaijani Central Bank devalued its currency by a third in February.
In particular, the balance of trade in the oil and gas sector was $5.4b, down from $15.1b compared to last year. This is important because oil and gas is a major earner for Azerbaijan.
Still, it could be worse. Kazakhstan, Azerbaijan’s oil exporting neighbour across the Caspian Sea, recorded a deficit in the first three quarters of the year having posted a surplus in 2014.
ENDS
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 16 2015 (The Conway Bulletin) – Georgia’s Central Bank increased its key interest rate by half a percentage point to 8%, its highest level since 2012. The move preceded a heavily telegraphed quarter of a percentage point increase by the US Federal Reserve that piled more pressure on Emerging Markets. Georgia’s interest rate measured 4% at the start of 2015.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 13 2015 (The Conway Bulletin) – Kazakhstan’s sovereign wealth fund Samruk-Kazyna has cut some costs but still needs to do more to help Kazakhstan through the current economic downturn, President Nursultan Nazarbayev said in an interview with local journalists. Mr Nazarbayev said the fund cut costs by 50b tenge ($145m) this year, but was continuing to buy subsidiaries.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 16/18 2015 (The Conway Bulletin) — In the weeks leading up to an interest rate increase by the US Federal Reserve Bank on Wednesday, Central Banks in the South Caucasus and Central Asia fretted about possible repercussion on their own currencies.
Janet Yellen, who chairs the Fed, said interest rates would go up by 25 basis points from 0.25% to 0.50%. The Fed had postponed the decision for months and a rate increase was widely expected.
What will happen now to Emerging Markets? The US dollar will inevitably become more attractive to investors, which are likely to pull capital away from Emerging Markets back to the US.
The day after the rate increase, the value of the dollar grew by 1% against six major currencies. This, in turn, could further depress the price of commodities and pressure currencies in Central Asia and the South Caucasus.
Shortly after the Fed’s decision, the Georgian Central Bank also raised its interest rates to 8%, up from a level of 7.5%. And the following morning the Central Bank of Azerbaijan issued a statement saying it expects the new rate to affect the currency markets in the region.
Kazakhstan had been on holiday while all this was happening, celebrating the 24th anniversary of its independence, but the impact on the Central Bank and the tenge have been tangible for weeks. The Central Bank twice skipped its monthly policy meetings in November and December, leaving analysts puzzled. On Friday, when Kazakhstan woke up from its festivities, the tenge hit an all-time low of 342.5/$1.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 8 2015 (The Conway Bulletin) – At a government meeting, Kazakh Central Bank chief Daniyar Akishev said all prices should be given in tenge. One of Mr Akishev’s main objectives is to make the tenge more prominent and to de-dollarise the economy. Many goods and services — rent, hotel rooms and luxury goods — are still priced in US dollars.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 10 2015 (The Conway Bulletin) – Georgia and China have agreed to begin free trade talks, an important step in strengthening relations. China has become an important economic player in Georgia. Georgia’s economy minister, Dimitri Kumsishvili, said he wanted to see Georgian wine and other agricultural goods exported to China.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 8 2015 (The Conway Bulletin) -Turkmenistan’s President Kurbanguly Berdymukhamedov reprimanded the head of the Central Bank and the head of the Commodity Exchange Agency at a government meeting, the Trend news agency reported.
Although details of the dressing- down were thin, as expected from Turkmenistan, it does indicate that, perhaps, Mr Berdymukhamedov is feeling the economic strain.
There have been a number of reports coming out of Turkmenistan over the year that show the country’s economy is under pressure from a drop in energy prices, a recession in Russia and a fall in value of currencies across Emerging Markets. At the start of the year the Central Bank devalued the manat currency by 19%. Last month, dissident websites reported that currency controls had been imposed.
And now this.
Trend reported that Mr Berdymukhamedov had told Central Bank chief Merdan Annadurdiyev and the head of the commodities exchange, Amandurdi Ishanov, that their work had been substandard. The report didn’t give any specific examples.
Mr Berdymukhamedov is keen on giving ministers a public dressing down. These reprimands generally betray some of his thinking on the country’s development. By focusing on the Central Bank and the commodities exchange, Mr Berdymukhamedov is showing his frustration with the economy.
With the distinct lack of accurate economic data flowing out of Turkmenistan, this is important.
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(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 11 2015 (The Conway Bulletin) — The Kazakh tenge keeps hitting record lows against the US dollar, trading around the 310/$1 mark in the second half of this week, and there is little indication that it will reverse this trend. The Central Bank has said it wants to scrap its previous monetary policy and find new solutions. The message it sent was, in essence: “we will play it by ear.” So much for restoring confidence in its monetary policies.
The Kyrgyz som stopped its fall and found its equilibrium at 75.6/$1 this week, the first stable week in months.
All other currencies were steady this week.
Next week, the US Federal Reserve Bank will hold a policy meeting. Analysts are bracing for the first interest rate rise since 2009.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
