NOV. 16 2015 (The Conway Bulletin) – Remittances to Georgia in October were 27% lower, at $90m, than during the same month in 2014, the Central Bank reported, an indication of the regional economic malaise. Remittances from Russia had nearly halved.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 13 2015 (The Conway Bulletin) – Kazakhstan’s trade turnover with member states of the Eurasian Economic Union – that’s Russia, Belarus, Armenia and Kyrgyzstan – has dropped by nearly 26% to $12.1b in the first nine months of this year compared to the same period in 2014, its statistics agency said.
The data is more evidence of the sharp downturn in the region’s economy. It is particularly jarring for Kazakh president Nursultan Nazarbayev who has been one of the main architects and biggest supporters of the Eurasian Economic Union. It was hoped that the trade bloc would stimulate trade but instead, by anchoring outlying economies to Russia, it has hampered it.
A sharp drop in oil prices and Western-imposed sanctions have tipped Russia into a recession and forced its rouble currency to drop in value.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 18 2015 (The Conway Bulletin) – In what would amount to a major change of Kazakh government policy, President Nursultan Nazarbayev said that he was considering cutting the number of diplomatic missions to save cash to soften the blow of the current economic downturn. Previously, Kazakhstan’s foreign ministry has been opening outposts in South America, Africa and south-east Asia.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 18 2015 (The Conway Bulletin) – Kazakhstan’s new Central Bank chief Daniyar Akishev said the tenge could fall further if oil drops below $40/barrel. The tenge has lost half its value this year. The price of Brent oil is around $44/barrel.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 20 2015 (The Conway Bulletin) – Prices in Armenia grew by 4.4% in the first 10 months of the year, media quoted the National Statistics Service as saying, pointing to high overall inflation for 2015.
Inflation has forced its way back onto the top of Central Bankers’ agenda this year. A collapse in local currencies’ values against the US dollar has triggered a sharp rise in prices for energy imports and domes- tic electricity production.
Inflation in Armenia is probably lagging inflation in neighbouring Georgia because the government has chosen to suck up the cost of the electricity price rises rather than pass
it on to consumers after a series of major demonstrations in the summer. In Georgia, the government has more successfully passed the cost of the electricity production on to consumers.
But, importantly, with another two months of the year to be factored into the final calculation, inflation in Armenia is already running above the initial estimates in the 2015 budget.
Trade turnover is also down, 20% lower in the first 10 months of the year compared to the same period in 2014. This is generally in-line with other economies across the Central Asia and South Caucasus region.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 19 2015 (The Conway Bulletin) – There are still hundreds of teething problems that Kyrgyzstan has to overcome to successfully complete its integration into the Kremlin-lead Eurasian Economic Union (EEU), the country’s representative on the EEU’s board, Danil Ibraev, told media. Kyrgyzstan joined the group, which also includes Belarus, Kazakhstan and Armenia, in August. Kyrgyz business owners have complained about bureaucracy.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 13 2015 (The Conway Bulletin) — The Kyrgyz Central Bank intervened in the currency market, selling around $14m on Friday to halt the fall of the som. It still fell 3% over the week finishing at 72.1/$1.
In Kazakhstan, the tenge was stable at 307/$1, although it reached a record low of 312/$1 on Monday.
The Georgian lari was stable at 240/$1 throughout the week.
In Armenia and Uzbekistan, currencies fell faster than previously. The Armenian dram lost 1% to 480.9/$1 and the Uzbek sum fell by 0.5% to just above 2,700/$1 on the official market. On the Black Market, the US dollar is reportedly selling at 6,200sum.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 10 2015 (The Conway Bulletin) – The amount of cash in Kyrgyzstan’s banking system held in foreign currencies jumped by 6.7% to nearly 65% between January and August, the Central Bank said according to Kyrgyz media reports.
This is a steep rise and highlights a lack of confidence in Kyrgyzstan’s som. It has lost around 26% of its value against the US dollar this year despite repeated interventions by the Central Bank to prop it up.
Inflation has also increased, although this has slowed over the past couple of months, pressuring people’s savings.
Interest rates are at a 10%, lower than they were at the start of the year but higher than at any time since 2012.
Like its neighbours, Kyrgyzstan has been struggling to deal with the fallout from a deepening economic malaise which has hit the region. One of its biggest problems has been a sharp drop in remittances sent back to Kyrgyzstan from workers in Russia.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 10 2015 (The Conway Bulletin) – Armenia’s Central Bank lowered its key interest rate by half a percentage point to 9.75%, its lowest level since January, because of slowing inflation.
The interest rate move highlights the delicate balance that Central Banks across Central Asia and the South Caucasus are having to strike between defending their currencies and stimulating growth to navigate through a deepening economic crisis.
The Central Bank said a drop in commodities prices and slowing global demand had dented price growth.
It said that inflation last month measured 0.4%, compared to 1% in October 2014. Overall annualised inflation measured 1.9% for the 12 months to the end of October.
“The board estimates that this trend will continue in the coming months and will have a deflationary impact on domestic prices,” the Central Bank said of weakening global commodities prices.
Armenia’ currency, the dram, has dropped by 15% this year against the US dollar. Its interest rates had risen to 10.5% in February but prices in Armenia have slowed, dragging down overall inflation.
The biggest problem for Armenia, like most of its neighbours in the South Caucasus is the recession in Russia.
This has hit vital remittance flows and also savaged is key export market. The Armenian dram is now overvalued against the Russian rouble and demand inside Russia has also dropped, hitting overall export potential.
This month, as the Bulletin reports in this week’s Business News, the country’s biggest fish farm business declared itself bankrupt. Its biggest market had been Russia and this market had disappeared.
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(News report from Issue No. 256, published on Nov. 13 2015)
NOV. 9 2015 (The Conway Bulletin) – After a four-month-long review linked to a drug doping scandal, Astana Pro cycling team received its World Tour licence. Astana Pro, which is funded by the Kazakh sovereign wealth fund Samruk-Kazyna and races in the national colours, has been involved in several doping cases since it was set up in 2007.
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(News report from Issue No. 256, published on Nov. 13 2015)
