Tag Archives: economy

Georgia picks banking board

SEPT. 21 2015 (The Conway Bulletin) – The members of Georgia’s new Banking Supervisory Board are all close allies of former PM Bidzina Ivanishvili, drawing immediate allegations of cronyism. The Banking Supervisory Board replaces the Central Bank as the authority over commercial banks. The head of the board is Konstantine Sulamanidze, former CEO of Progress Bank in which Mr Ivanishvili owns a stake.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Uzbek-Kyrgyz trade halves

SEPT. 22 2015 (The Conway Bulletin) – In Jan.-July 2015, trade turnover between Uzbekistan and Kyrgyzstan halved to $78.4m compared to the same period in 2014, according to Kyrgyz customs data. The figure shows the impact of the economic downturn.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Currency: Kazakh tenge, Kyrgyz som

SEPT. 25 2015 (The Conway Bulletin) — Last week’s decision by the US Federal Reserve Bank not to modify interest rates was welcomed across Central Asia and the South Caucasus, where currencies performed well.

The Kazakh tenge, the Georgian lari and the Kyrgyz som all recouped 2% against the dollar and a timid 1% improvement was also noted in Armenia and Azerbaijan. Markets are still weak, however. Had it not been for Central Bank interventions for millions of dollars in Kazakhstan ($620m in one week), Georgia and Kyrgyzstan (around $30m each), their currencies would have kept falling.

By the end of the week, the Kazakh tenge was trading up 2.5% against the US dollar at 264/$1, the Kyrgyz som was up 2% at 69/$1 and the Georgian lari was up 2.4% at 2.39/$1.

Also, and this is interesting, a study from researchers at the International Monetary Fund found that the lack of confidence in domestic currencies and ingrained behaviours have hindered any policy of de-dollarisation across Central Asia and the South Caucasus.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Trade turnover drops in Armenia

SEPT. 22 2015 (The Conway Bulletin) – Trade turnover in Armenia dropped by over 5% in the first eight months of the year compared to the same period in 2014, media reported quoting the country’s statistics office. Media also reported that consumer prices had risen by 4.8%. Both indicators show the pressure that the Armenian economy is under.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Kazakh CBank intervenes again

SEPT. 21 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank bought $200m-worth of tenge to protect its currency after it broke through the psychologically important 300/$1 barrier. Despite pledging not to intervene in the value of the tenge, the Kazakh Central Bank has spent over $700m this month on its defence.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Turkmenistan taxes alcohol, cigarettes

SEPT. 19 2015 (The Conway Bulletin) – Turkmenistan’s parliament, a rubber-stamping chamber for President Kurbanguly Berdymukhamedov, passed a law which will impose more tax on tobacco and alcohol. Turkmenistan has been looking to raise more tax during the current economic downturn.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Georgia’s Central Bank intervenes

SEPT. 21 2015 (The Conway Bulletin) – Georgia’s Central Bank said it bought $27m worth of lari to strengthen its currency. This is the 6th intervention by the Central Bank this year to prop up its currency which has lost around 37% since September 2014. It said earlier this year that it wouldn’t prop up its currency.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Markets: ADB’s growth outlook for the South Caucasus and Central Asia

SEPT. 22 2015 (The Conway Bulletin) — The Asian Development Bank published an updated Outlook for the economies of Central Asia and the South Caucasus, downgrading growth prospects across the region.

The ADB set growth for 2015 at 3.3%, down from an earlier forecast of 3.5% and the organisation says inflation will hit 8.1% this year, triggered by the latest devaluing of the Kazakh tenge and the Kyrgyz som. In Kazakhstan, in particular, “the new exchange rate is expected to dampen consumption and investment further,” the ADB said. A worrying outlook.

The trend for lower capital investments across the region, however, could be reversed in 2016-17, according to the ADB. The governments will play a major role as drivers of future growth as the main source of investments for years to come.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Moody’s drops Kazakhstan growth

SEPT. 22 2015 (The Conway Bulletin) – International ratings agency Moody’s lowered its growth prediction for Kazakhstan in 2016 to 2% from 2.2%. Moody’s kept its forecast for 2015 steady at 1.5%. Low oil prices have hit Kazakhstan’s budget and its ability to generate revenues.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)

Kazakh Central Bank wants loans in tenge

SEPT. 23 2015, ALMATY (The Conway Bulletin) — The Kazakh Central Bank presented a bill to parliament that will force people to take loans in tenge, a tactic it says is necessary to wean the economy off its addiction to US dollars.

Shaken by a 40% drop in the value of the tenge over the past 18 months, the Central Bank wants to ensure that commercial banks do not accrue a large amount of bad loans in US dollars as they did during the 2008/9 Global Financial crisis.

“This is an effort to protect customer’s rights and to decrease the rate of non-performing loans for second-tier banks,” Kuat Kozhakhmetov, deputy chairman of the Central Bank, said when he presented the bill to the parliament.

If the bill becomes law, people who have not earned their salary in a foreign currency for the 6 months before asking for a loan will will only be able to apply for a tenge loan.

According to a recent IMF study, almost 60% of the total loans issued by financial institutions in Kazakhstan are denominated in a foreign currency. The Central Bank also said that 14% of mortgages are currently denominated in foreign currencies.

People in Kazakhstan have used foreign currency loans to buy goods indexed to the US dollar or the Russian rouble, such as houses or cars. Salaries are often paid in tenge but are indexed to the US dollar.

A fall it the value of oil and a slump in the Russian economy has pressured the tenge and other regional currencies. Loans taken out in US dollars have become much more expensive to service.

ENDS

(News report from Issue No. 249, published on Sept. 25 2015)