DEC. 9 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank changed the reserve requirements for its commercial banks to reflect the less stable state of the Kyrgyz som. It reduced the proportion of minimum reserves held in som by 4.5% to 4% of a bank’s total reserves and also increased the requirement to keep 12.5% of the bank’s cash in foreign currency, up 2.5%.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 7 2015 (The Conway Bulletin) – In tenge terms, prices for new housing in Kazakhstan have risen on average by 12% in the year to the end of November, media reported quoting the national statistics agency. The rise is a reflection of the devaluation of the tenge and also of rising inflation. The tenge has lost around 40% in value this year.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 7 2015 (The Conway Bulletin) – The Manila-based Asian Development Bank approved a grant of $53.4m and an additional loan of $6.6m to Tajikistan to help it develop private businesses. The ADB said the grant was designed to bring in programmes that would reduce business costs as well as increase protection for small companies.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 10 2015 (The Conway Bulletin) – Remittances to Kyrgyzstan were 30% lower in the first 10 months of the year compared to the same period in 2014, said the head of the Central Bank, Tolkunbek Abdygulov. This shortfall, triggered by a recession in Russia and a fall in the value of the som, has blown a $400m hole in the national budget.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 9 2015 (The Conway Bulletin) – Foreign direct investment in Georgia, an important part of its economy, was 17% less in the first nine months of this year compared to the same period in 2014, the Georgian statistics agency said.
Georgia’s FDI rate has only just started to recover from the war against Russia in 2008 and the 2008/9 Global Financial Crisis.
In total, net inflow of investments in Georgia measured over $1b between January and September. And this net inflow has picked up pace throughout the year. In Q1 it measured $175m, in Q2 $355 and in Q3 $489m.
The transport and communications sector received by far the greatest volume of inflows with $218m invested in Q3. Construction has been up and down. For most of 2013 it recorded near zero FDI before recording large growth in 2014.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 7 2015 (The Conway Bulletin) – Georgia’s Central Bank chief Giorgi Kadagidze hinted at another interest rate rise to control inflation. He said inflation would peak next year before dropping back. At the start of last month, Georgia’s Central Bank increased its key interest rate by 0.5% to 7.5% — it’s highest level since 2011.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 7/10 2015 (The Conway Bulletin) – Ratings agencies Standard & Poor’s and Fitch said that worsening economic conditions in Kazakhstan threaten to generate bad debt that could drag down the banking sector.
The warnings add to the mounting analysis which suggest that the initial impact of low oil prices and a recession in Russia were underestimated. Last week the World Bank said that the Kazakh economy would grow by its lowest rate since the 1990s.
Specifically Standard & Poor’s downgraded the rating of Almaty-based Eurasian Bank to B from B+ because of an increase in its non- performing loan portfolio.
“The level of non-performing loans increased to 11.1% of total loans on Nov. 1, 2015 from 7.5% on Jan. 1, 2015,” it said in a statement.
Non-performing loans are those which are more than 90 days overdue.
After the Global Financial Crisis of 2008/9, Kazakhstan’s banks held portfolios with the largest proportion of non-performing loans in the world. It had managed to reduce this before the onset of the current economic malaise.
But the current economic problems have slowed this recovery.
Similarly to the World Bank last week, Fitch said the Kazakh economy would grow by just 1% this year.
“Medium-term prospects for Kazakhstan’s banking system have deteriorated in 2015 due to lower oil prices, the economic slowdown (especially in non-extractive sectors) and the weaker tenge,” it said in a statement.
Unlike the World Bank, though, it did say the recovery would be quicker and that the Kazakh economy would grow by 2.3% in 2015, compared to a World Bank estimate of 1.1%.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 4 2015 (The Conway Bulletin) -The IMF gave Kyrgyzstan a $13m grant after a generally positive review of its economic progress since a credit arrangement was agreed earlier this year.
Kyrgyzstan’s government, under pressure from a regional economic downturn, will welcome both the grant and the positive IMF review.
“The Kyrgyz authorities have managed successfully to keep the program largely on track despite that the economy continues to face adverse external and domestic shocks,” the IMF said in a statement.
In May, the IMF approved a so called-Extended Credit Facility for Kyrgyzstan. This, in short, meant that Kyrgyzstan would receive $92.4m over the next three years if it stuck to a tight fiscal regime that reigned in public spending, improved tax collection and targeted inflation through its various monetary policy levers.
The deal also meant a twice- annual report by the IMF on Kyrgyzstan’s progress. These reports would form the basis of whether the next tranche of the IMF’s phased grant could be released to Kyrgyzstan.
And this latest report means that the next $13m can be handed over.
“Monetary policy will remain on a tightening bias to contain inflation pressures,” the IMF said in its report.
“The Central Bank will also continue to pursue a flexible exchange rate policy to safeguard foreign exchange reserves and preserve competitiveness, with interventions limited to smoothing short-term fluctuations.”
Kyrgyzstan’s Central Bank has been spending heavily to maintain the strength of its currency.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC. 9 2015 (The Conway Bulletin) – The tenge/$ rate has reached a balanced position, Kazakh PM Karim Massimov said, suggesting that the national currency will not lose much more value against the US dollar. By Dec. 9, the tenge traded at around 309/$1. It has lost around 40% of its value this year.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
DEC.11 2015 (The Conway Bulletin) – Foreign Direct Investments (FDI) are picking up again in the South Caucasus and Central Asia. After a difficult year hooked around the fall in the rouble and the drop in oil prices, investors have appeared to regain confidence in the economies of Central Asia and the South Caucasus. Or at least they have decided to just get on with it and deal with the economic downturn.
At least this is what the numbers show.
In Armenia FDI, measured by Central Banks as inflow minus outflow, reached $260m in the first 9 months of the year, a 17% increase compared to the same period last year.
In Georgia, although down 17% compared to the first three quarters of 2014, FDI grew progressively throughout the year, to reach just above $1b at the end of September.
Kyrgyzstan, which saw a surge of FDI in the first half of the year, might be on track to keep the trend going due to renewed confidence in the country’s extractive sector.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 260, published on Dec. 11 2015)
