Tag Archives: economy

EU says to give Georgia grant

NOV. 27 2015 (The Conway Bulletin) – The European Union confirmed that it was preparing to give Georgia a grant of 100m euro to help improve parts of its society and business climate. Most of the grant is directed to Georgia’s agriculture sector but public bodies and utilities will also receive a chunk of the grant.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Kyrgyzstan keeps rates steady

DEC. 1 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank decided to keep its interest rate unchanged at 10% for the third month running because of slowing inflation. It also said that its reserves had fallen by 12% this year as it tried to defend its currency.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Kazakh Central Bank skips meeting

DEC. 3 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank cancelled its monthly monetary policy meeting for the second consecutive month, disappointing markets which were looking for guidance on future policy. The Central Bank said that money markets were too unstable for it to announce policy. Critics said it had lost control of the tenge.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Inflation rises in Kazakhstan

DEC. 4 2015 (The Conway Bulletin) – Inflation in Kazakhstan to the year ending Nov. 30 measured 12.8%, the state’s statistics committee said. The sharp prices rises show the impact of the tenge devaluation on the economy. The main inflation driver has been food prices.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Tajik somoni hits record low

DEC. 1 2015 (The Conway Bulletin) – Tajikistan’s somoni currency fell to its lowest ever level of 7/$1 just as the Central Bank was bringing in draconian new rules which will shut all independent exchange kiosks within two months.

So far this year, the somoni has lost 31% of its value. The Central Bank has previously admitted that it is on the verge of running out of money, having spent its reserves propping up its ailing currency.

The Central Bank issued a statement saying that the remaining 763 currency exchanges would be closed over the next few months and that people would only be allowed to make currency exchanges through the banks.

Ordinary Tajiks have seen this before. In April, the Central Bank issued a similar edict which closed half the exchange booths in the country. It didn’t stop the currency slide, though.

Between April and the end of November, the somoni fell from 5.8/$1 to 6.7/$1, a fall of 15.5%.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Azerbaijan’s Central Bank reserves drop

DEC. 2 2015 (The Conway Bulletin) – In an effort to prop up its manat currency, Azerbaijan’s Central Bank said it has spent nearly 60% of its currency reserves. Azerbaijan’s Central Bank held $6.8b at the end of October, down from $13.8b on Jan. 1. Azerbaijan devalued the manat by a third in February but this hasn’t stopped the slide.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Lydian secures funds to develop Armenian gold mine

DEC. 1 2015 (The Conway Bulletin) — Toronto-listed miner Lydian International said it had reached a $325m financing agreement to develop a gold mine in Armenia, an initiative that will boost the country’s gold output.

In a detailed statement, the company said it will receive a line of funding from US-based investment firms Orion Mine Finance and Resource Capital Funds. The money will be used to start construction at the Amulsar gold project in south- central Armenia.

Once preparation work is completed next year according to the company, Lydian forecasts a production rate of around 6 tonnes of gold per year from the Amulsar project. For a comparison, Armenia produced 3.5 tonnes of gold in 2013.

Lydian has been working on financing the project since 2006.

A fall in gold prices, down around 13% year-on-year on Dec. 1 at $1,069/ounce – a 5-year low, has put pressure on mining companies with operations in the South Caucasus and Central Asia.

Lydian’s CEO Howard Stevenson said the agreement with Orion and RCF was a major step forward, especially considering the current financial markets.

“The Financing provides over 75% of the overall financing requirement, which is a strong achievement in the current financial market,” Mr Stevenson said in a company statement

Armenian PM Hovik Abrahamyan also said the government was pleased Lydian had won backing for the project.

“The financing of the construction of the Amulsar Mine represents a significant step forward in the development of the mining industry in Armenia,” Mr Abrahamyan said in a statement.

Gold is an important cash earner for the Armenian government but although potentially lucrative for the state, the project has angered people who worry about the environmental degradation. In 2014, police dispersed a large crowd of protesters around the mine.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Kazakhstan issues new (devalued) 20,000 tenge note

DEC. 1 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank issued its first 20,000 tenge note, depicting the Akorda presidential palace and a mock Arc de Triumphe in Astana and the Eli winged statue in Almaty’s central square.

When the idea of the blue, grey 20,000 tenge banknote was conceived in 2013, it would have been worth around $129.

Now, after two devaluations linked to the drop in oil prices and the fall of the Russian rouble, Kazakhstan’s 20,000 tenge is worth $65.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Inflation rises in Georgia, again

DEC. 3 2015 (The Conway Bulletin) – Year-on-year inflation in Georgia rose to 6.3% from 5.8%, the national statistics agency said, its highest level for four years. Although the year-on-year rate is rising, the month-on-month rate has slowed to 0.3% from 0.8% in October and 1.1% in September. Like other economies, Georgia’s currency has lost value this year, pushing up the cost of imports.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Currencies: Kyrgyzstan’s som, Tajikistan’s somoni

DEC. 4 2015 (The Conway Bulletin) — The Kyrgyz som continued its slump against the dollar and now trades at above 75.5/$1. The Central Bank chairman Tolkunbek Abdygulov said the exchange rate had changed because of a speculative attack and promised to continue to intervene to prop up the currency. The regulator said that local bank FinanceCredit was found guilty of speculative trading of the som. In addition, the Central Bank fined several exchange points across the country for speculating on currency rates.

In Tajikistan, the somoni was stable at 6.7/$1, after a rough week. On Nov. 30, media reported that Dushanbe residents had to pay around 7.5somoni for $1. The Central Bank reacted by drafting a decree that shut down the remaining private exchange bureaus in the country. Earlier in April, it had forced the closure of over 800 out of a total of 1,500 exchange bureaus because it said they were taking advantage of the unstable currency markets.

On Dec. 1, the Central Bank also reported the arrest of six employees of exchange bureaus for currency speculation. As with the Kyrgyz incidents, the details of these so-called speculative attacks have been difficult to pin down.

But none of this is surprising in Central Asia’s currency markets.

We witnessed a similar trend in Kazakhstan in 2014, when a devaluation of the tenge was followed by speculative attacks on the currency and interventions to keep the tenge from plummeting. This was repeated this year again in Kazakhstan.

It is likely that both Tajikistan and Kyrgyzstan will follow this trend and crack down on private exchange bureaus to strengthen their control over exchange rates.

In much of the rest of the region, currencies did not move. The exception was Uzbekistan. The Uzbek sum reached a new record trading low, officially, at 2,755/$1. In the last year, it lost almost 15% of its value.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)