Tag Archives: interest rates

Kazakhstan keeps interest rates steady

AUG. 29 2017 (The Conway Bulletin) — Kyrgyzstan kept its key interest rate at 5%, citing low inflation and strong economic growth. Central Asia is emerging from a period of low growth, pressured by sluggish Russian economic performance. The latest economic data adds to the generally improving picture. Only a year ago, central banks in the region were boosting interest rates in an effort to dampen inflation and prop up ailing currencies.

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(News report from Issue No. 342, published on Sept. 7 2017)

Kazakh Central Bank cuts interest rates

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ALMATY AUG. 21 2017 (The Conway Bulletin) — Kazakhstan’s Central Bank cut its key interest rate by a quarter of a percent to 10.25% because it said that inflationary pressures had slowed. It also said, though, that further rate cuts this year were unlikely. The Kazakh Central Bank had yanked up interest rates to 17% in 2016 because of a collapse in the value of the tenge and also inflationary pressure.

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(News report from Issue No. 341, published on Aug. 27 2017)

Azerbaijan’s CB keeps interest rates steady

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AUG. 1 2017 (The Bulletin) — Azerbaijan’s Central Bank kept its key interest rate at 15% saying that it had seen some improvements in key economic indicators over the past few months. Specifically, it said that growth in the non-oil sector had been 5.4% in the first half of the year, 3.7% increase in trade volumes and 2.2% increase in agriculture. The Central Bank said, though, that inflation remained a concern.

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(News report from Issue No. 336, published on Aug. 5 2017)

Armenia’s CB keeps interest rates steady

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JUNE 27 2017 (The Bulletin) — Armenia’s Central Bank kept its key interest rate unchanged at 6%, holding true to is assessment earlier this year that it would stop its easing cycle to ward off a potential jump in inflation. Armenia had been measuring deflation until the start of this year when it said that the economy had turned a corner and that prices were now rising. It had steadily slashed its interest rate from 10.5% in 2015 to 6% in February 2017.

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(News report from Issue No. 335, published on July 3 2017)

Kyrgyz CB keeps interest rate steady

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JUNE 28 2017 (The Bulletin) — Kyrgyzstan’s Central Bank kept its key interest rate steady at 5% because of rising inflation and economic growth. The rate decision is good news as it will be seen as a positive assessment of the Kyrgyz economy which has been battling against a downturn over the past three years or so. Inflation in Kyrgyzstan is currently running at around 3.8%. At the end of last year it was recording deflation.

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(News report from Issue No. 335, published on July 3 2017)

Georgia’s CB keeps interest rate at 7%

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JUNE 14 2017 (The Bulletin) — Georgia’s Central Bank said that it was keeping its key interest rate at 7% because of stubbornly high inflation. It said that inflation in May was 6.6%, above its 4% annual target, although it also said that it expected the rate of price rises to drop in the second half of the year. Higher taxes and increased prices for imported goods have pushed up prices in Georgia this year. Georgia had slashed rates last year to 6.5% from 8% but started to raise it again in January.

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(News report from Issue No. 333, published on June 19 2017)

Kazakhstan cuts key interest rate

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JUNE 6 2017 (The Bulletin) — Kazakhstan cut its key interest rate to 10.5% from 11% because it said that its currency had recovered. The Kazakh Central Bank has steadily cut its interest rate from a high of 17% at the start of 2016. It has said that the Kazakh economy is recovering. This year, the tenge has increased in value by 5% against the US dollar.

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(News report from Issue No. 332, published on June 12 2017)

Georgia’s Central Bank raises rates

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MAY 2 2017 (The Conway Bulletin) — Georgia’s Central Bank raised interest rates to 7% from 6.75%, its highest rate since June 2016, because of supply-side price pressure. One of the Central Bank’s key remits is to keep inflation at 4% and it said that one- off price rises, such as an increase in excise duties, were pushing up prices. It also said, though, that it didn’t expect any more interest rate rises this year. Annualised inflation in March was 5.4%.

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(News report from Issue No. 327, published on May 5 2017)

Kazakhstan says interest is high for privatisations

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ALMATY, APRIL 5 2017 (The Conway Bulletin) — A senior official at Samruk Kazyna, Kazakhstan’s sovereign wealth fund, said that the up-and-coming privatisations of Air Astana, the national airline, and Kazatomprom, the state nuclear company, were attracting a lot of attention from Western investors.

In an interview with Reuters in London, Berik Beisengaliyev, managing director for assets optimisation of Samruk Kazyna, also said that the Kazakh government had sold off 120 small and medium sized companies. Samruk Kazyna is Kazakhstan’s $67b sovereign wealth fund.

“We saw a very positive mood in the market,” he was quoted as saying. Kazakhstan has been promising the so-called People’s IPO that would see chunks of the country’s biggest companies listed on both the Kazakh Stock Exchange and an international exchange. It has continually delayed the IPOs, mainly because market conditions have moved against sales.

Still, Mr Beisengaliyev said that the sale of the smaller companies would be complete by the end of 2018 allowing the government to sell off what have been considered its top tier assets.

As well as Air Astana, which is 49% owned by BAE Systems, and Kazatomprom, the world’s biggest uranium producer, the more high profile companies slated to be sold off, or at least be partially privatised, include Kazpost, oil and gas company Kazmunaigas and railway operator Temir Zholy.

A third tier of companies are being considered for sale to strategic investors, single high-profile companies instead of the multiple smaller investors attracted through an IPO, Mr Beisengaliyev said. These companies include domestic airline Qazqom, Kazakhtelecom and mining company Teu-Ken Sumruk.

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(News report from Issue No. 324, published on April 13 2017)

Comment: The green shoots of a recovery are visible

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APRIL 6 2017 (The Conway Bulletin) — In Edinburgh, where The Conway Bulletin has its editorial HQ, the green shoots of a timid spring are finally beginning to breakthrough after a long, grey winter.

And it’s the same scenario for the economies of Central Asia and the South Caucasus. A deep, bleak winter has enveloped them since mid-2014 but now, finally, data suggests a revival is on the horizon.

In this week’s newspaper, we report that both the Kyrgyz and Armenian Central Banks have kept their key interest rates steady. This, in itself, is a victory. Armenia has been furiously cutting its rates from a high of 10.5% in 2015 to 6% to try to stimulate growth and beat deflation. Now it says this policy has gone far enough and that inflation of around 4% is predicted this year.

In Kyrgyzstan, the economic news is even more upbeat. In its statement explaining just why it had kept interest rates steady, the Central Bank said that it was no longer having to intervene in the money market to keep the som currency from sliding. It also said that the economy had grown by 5.4% in January and February compared to the same period in 2016.

Armenia and Kyrgyzstan are two of the smaller economies in the region but the larger economies are also reporting positive news.

In Georgia, the statistics agency said that the economy had grown by 4.8% in the first two months of the year, pushed up by a growth in exports and an all- important rise in remittances. Georgia may also be benefiting from several local factors. Improved relations with Russia have given exports a major boost, especially wine, and the scrapping of visa regulations for Iranians has encouraged a large rise in tourists and business trips.

For the region’s two major economies the data has been less flattering, although there are still signs of improvements. In Azerbaijan, there is disagreement between economists on whether its economy will grow or not after it shrank by 3.8% in 2016. It’s dependent on oil, and prices are currently hovering around $50/barrel, above the anticipated $40/barrel.

In Kazakhstan, the Central Bank last month cut its interest rate and gave its most upbeat assessment of the economy, pointing out that inflation was under control and growth was expected.

And if you’re still not convinced about those green shoots of economic recovery, and that’s understandable as, just like a Scottish spring, they are fragile, take a look at the Azerbaijani manat and the Kazakh tenge. They are both up against the US dollar by more than 5% this year.

By James Kilner, Editor, The Conway Bulletin

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(News report from Issue No. 323, published on April 6 2017)