JUNE 8 2015 (The Conway Bulletin) – The IMF changed its forecast for Azerbaijan’s economy this year to reflect improved conditions, media reported. Reports quoted the IMF mission chief in Baku, Raja Almarzogi, as saying the IMF had increased its economic growth forecast in 2015 to 1.8% from 0.6%.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – The Uzbek-US joint car-maker General Motors Uzbekistan said it would discount two of its models by 15% until the end of 2015, an admission of sorts that its needs to boost sales to counter a falling market linked to economic turmoil in Russia.
Customers, though, can only claim the 15% discount on Lacetti and Cobalt cars by paying in US dollars with international debit and credit cards.
The car plant in the eastern town of Andijan is critical for jobs in the surrounding region and also an important barometer of Uzbek industry.
Most of its sales are made in Russia and also in neighbouring Kazakhstan but the fall in oil prices has hit the region and badly dented demand for cars.
In March, the plant sold 1,757 cars compared to 4,604 cars in the same month a year earlier, the Association of European Businesses, an industry lobby group, said.
As well as driving up car sales (pun intended), the government may also be looking to bolster US dollar flows in its economy.
Information leaking out of Uzbekistan on the state of the economy is light but it does appear to show that the slowdown in the Russian economy is having a major impact on Uzbekistan. Remittances are hugely important in Uzbekistan. They rely on a strong Russian economy. Economists have estimated that these will fall by 40% this year. Global gas prices, another important foreign currency earner for Uzbekistan, are also low.
By imposing a dollar payment scheme on car buyers, the Uzbek government may be trying to get hard currency flowing through the system once again as well as boosting sales at its flagship industrial asset.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 10 2015 (The Conway Bulletin) – Saudi Arabian Prince Al-Waleed Bin Talal bin Abdulaziz al Saud visited Tbilisi and met separately with both PM Irakli Garibashvili and President Giorgi Margvelshvili. Prince Al-Waleed is a billionaire investor. Georgia has said it wants to boost foreign direct investment.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – Russia’s Lukoil will knock 10% off the price of assets in Kazakhstan it plans to sell to China’s Sinopec to ease the deal through, media reported quoting industry sources. The discount shows how oil and gas assets in Kazakhstan have lost value since oil prices fell sharply.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – The IMF jumped into an increasingly vicious row over supervisory oversight of commercial banks in Georgia by criticising the government’s plans to strip the Central Bank of the responsibility.
In a rare intervention into domestic politics, the IMF released a statement
which said it was worried about the implications that a change of supervisory powers would bring.
“The IMF is concerned that recent proposals to amend the central bank law would put NBG (National Bank of Georgia) independence at risk,” the statement said.
The government’s plan, which some suspect has been motivated by a desire to punish the Central Bank still headed by senior officials appointed by the previous administration of Mikheil Saakashvili, has been controversial from the start. A group of businesses warned that the policy change would not only pose a threat to the banking system, but also to the business and investment climate. This sentiment was supported by President Giorgi Margvelashvili, who said he would veto the bill if it was adopted by parliament.
The government has said that it wants to transfer responsibility for the oversight of commercial banks to an independent body to improve and strengthen this oversight. It has fallen out with Central Bank chief Giorgi Kadagidze over his handling of the economic storm which has battered the region.
IMF made its statement the day after former PM and Georgia’s most powerful man, Bidzina Ivanishvili, backed the proposed changes.
Mr Ivanishvili set up the governing Georgian Dream coalition and is considered the country’s chief power broker. He has clashed with both Mr Margvelashvili and Mr Kadagidze.
It its statement, the IMF also reiterated its public support for Mr Kadagidze, pitting itself firmly against Mr Ivanishvili and Mr Margvelashvili.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 10 2015 (The Conway Bulletin) – At the fourth EU-Tajikistan Cooperation Committee in Brussels, the European delegation confirmed it had earmarked 251m euro for Tajikistan over the next five years to improve rural areas. The EU said the aid was more necessary now because of the drop in remittances.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 10 2015 (The Conway Bulletin) – Georgia’s foreign exchange reserves fell by $37.4m in May to $2.4b, the Central Bank said. Georgia has sold foreign currency reserves to prop up its lari currency.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – Azerbaijan’s foreign currency reserves inched up in May for the first time in a year, according to Central Bank data, suggesting that pressure on its manat currency had eased off. Like other countries in the region, Azerbaijan has been fighting to maintain the strength of its currency.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 11 2015 (The Conway Bulletin) – After 20 years of negotiations, Kazakhstan has completed talks with the World Trade Organisation and should join the group by the end of the year. The WTO said that although there had been issues around Kazakhstan’s bilateral agreements and its membership of the Kremlin-led Eurasian Economic Union, a deal had been struck.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – Oleg Smolyakov, deputy chairman of Kazakhstan’s Central Bank, said a change of monetary policy to target inflation instead of a stable exchange rate would not be possible within the next couple of years, the first sign of a row back on the high- profile strategy.
The potential row-back will disappoint businesses and international observers who have urged the Kazakh Central Bank to allow its tenge currency to float more freely.
“We believe that we cannot afford switching to inflation targeting within a time range of one to two years,” media quoted Mr Smolyakov as saying.
This is a departure from the bullish declaration by Central Bank chief Kairat Kelimbetov who said Kazakhstan would liberalise its currency market.
According to Mr Smolyakov, Kazakhstan needs more tools to switch from the current currency corridor to targeting inflation. A sharp fall in the value of the Russian rouble since last summer has pressured currencies and economies across the region.
Also, seemingly eager to smooth public concerns over a volatile currency, Mr Smolyakov said the Kazakh tenge would remain stable with oil prices over $50 per barrel.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 235, published on June 11 2015)
