JAN. 6 2016 (The Conway Bulletin) — London-listed Central Asia Metals said it achieved record high production levels at its copper plant in Kazakhstan, boosting its plans for 2016. Over 12,000 tonnes of copper were recovered in 2015, an 8.4% jump compared to 2014.
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(News report from Issue No. 262, published on Jan. 8 2016)
DEC. 23 2015 (The Conway Bulletin) – A judge in Austria ruled that Rakhat Aliyev hanged himself in a prison cell in Feb. 2015 shortly before he was due to appear in court charged with the murder of two bankers outside Almaty nearly 8 years earlier. Some people had suggested that Aliyev, previously a son- in-law and close confident of Kazakh president Nursultan Nazarbayev, had been murdered. The Kazakh authorities had wanted to extradite him.
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(News report from Issue No. 262, published on Jan. 8 2016)
JAN. 7 2016 (The Conway Bulletin) – The World Bank cut its economic outlook for Kazakhstan in 2016 to 1.1% because of sustained low oil prices. It had earlier predicted growth of 1.9% in 2016, up from 0.9% in 2015. Kazakhstan has been hard hit by the sudden and sustained fall in the price of oil.
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(News report from Issue No. 262, published on Jan. 8 2016)
JAN. 7 2016 (The Conway Bulletin) — The New Year did not change the fortunes of currencies in the South Caucasus and Central Asia. All currencies are still suffering against a strong US dollar and Central Banks are intervening to prop them up.
Undoubtedly, the most notable decision came just before the holidays when Azerbaijan ditched its currency peg to the dollar and let the manat slide. After a 48% fall, the currency found its equilibrium at 1.55/$1. It is now trading at 1.57/$1.
In Kazakhstan, the tenge recovered towards the end of December, but it slid to 345/$1 in January.
Tajikistan witnessed the worst start of the year, with its somoni currency falling 2.5% in the first week of January, trading at 7.17/$1. Notably, exchange points have been charging a premium of 8-10% on currency transactions in the past few weeks.
In Kyrgyzstan the Central Bank has kept the som stable at 75.9/$1 by intervening several times.
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(News report from Issue No. 262, published on Jan. 8 2016)
DEC. 25 2015 (The Conway Bulletin) – Kazakh President Nursultan Nazarbayev’s ally Nurtai Abykayev retired as chairman of the National Security Committee, one of the most influential posts in the country. Mr Abykayev, 68, had been chairman of the National Security Committee since 2010, the second time he had held the position. Vladimir Zhumakhanov, previously his deputy, takes over as head.
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(News report from Issue No. 262, published on Jan. 8 2016)
JAN. 8 2016 (The Conway Bulletin) – Both Kazakhstan and Azerbaijan ditched their currencies’ peg to the US dollar in 2015, triggering sudden and sustained depreciation of their currencies.
These were tough, but necessary calls by their Central Banks as these currencies were over-valued compared to oil and the Russian rouble.
What happens next differentiates Azerbaijan and Kazakhstan.
Kazakhstan has allowed, with the odd intervention, its currency to devalue. The Azerbaijani Central Bank, by contrast and very much in keeping with the tight way that the country is run, appears determined to anchor the manat more-or-less at its current rate against the US dollar. The rhetoric may be of liberalisation but the actions are of a conservative and uptight Central Bank.
And this comes across in other ways too. A couple of weeks after the devaluation, Azerbaijan imposed a rule that only people presenting their official ID could change more than $500 into foreign currencies. This could be the first of many exchange controls.
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(Editorial from Issue No. 262, published on Jan. 8 2016)
DEC. 19 2015 (The Conway Bulletin) – Kairat Satybaldy, the 45-year-old nephew of Kazakh President Nursultan Nazarbayev, quit as secretary of the Nur Otan party, one of the most high profile and influential political jobs in the country. Nur Otan is Mr Nazarbayev’s political party. Mr Satybaldy had been secretary of Nur Otan for six years. Some analysts have said he is a potential successor to Mr Nazarbayev.
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(News report from Issue No. 262, published on Jan. 8 2016)
ALMATY, JAN. 3 2016 (The Conway Bulletin) — Russian energy company Lukoil said Western sanctions have damaged its ability to carry out exploration work in the Kazakh section of the Caspian Sea, just as Kazakhstan’s government said it wanted to intensify the search for oil and gas.
Amid an ongoing economic downturn, Kazakhstan’s state-owned energy company Kazmunaigas is looking to boost revenues through new oil and gas projects. In the northern section of the Caspian Sea, Russia’s Rosneft and Lukoil are its main partners.
But Lukoil said Western sanctions had hit its operations.
“We don’t have free available drilling rigs and we cannot import them because of Western sanctions,” Vagit Alekperov, Lukoil’s CEO told Russia-24 in an interview.
Kazakh-Russian consortia explored several fields for oil and gas in the early 2000s but failed to make any major discoveries. Although there were some promising indications that fields held decent reserves, most of the projects were suspended as costs mounted.
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(News report from Issue No. 262, published on Jan. 8 2016)
JAN. 7 2016 (The Conway Bulletin) — After Azerbaijan abandoned its currency peg to the US dollar, leading to a second sharp depreciation of the manat in 10 months, confidence in South Caucasus and Central Asian currencies reached a new low.
2015 was a tough year, which began with Turkmenistan slashing 19% off the value of its manat currency on Jan. 1, hinting that oil and gas exporting countries were facing bad times.
The following February, Azerbaijan devalued its currency and later in August Kazakhstan stopped pegging the tenge to the US
dollar, a decision that triggered a sharp depreciation. But although this trend is closely linked to the fall in oil prices since the summer of 2014, that’s not the whole story.
After the rouble collapsed at the end of 2014, it was only a matter of time for countries that enjoyed high trade volumes with Russia. They had to follow suit and devalue their currencies to remain competitive.
In addition, devaluing and unpegging a currency may also serve as a way to give stability to the domestic budget.
Kazakhstan’s Central Banker Daniyar Akishev said the tenge will follow the price of oil. That way energy-exporting firms will have a chance of balancing their books.
But countries with unpegged currencies need to keep an eye on speculation. Azerbaijan now requires a valid ID for currency exchange of more than $500 in value. Tajikistan put in place limits to ATM withdrawals of $400 and could reduce the number of licences for exchange points.
And interventions are unlikely to cease. Kyrgyzstan and Georgia’s Central Banks have already marked the first week of 2016 with purchases in the currency market.
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(News report from Issue No. 262, published on Jan. 8 2016)
DEC. 23 2015 (The Conway Bulletin) – Kazakhstan’s parliament ratified a deal to take a $1b loan from the Asian Development Bank to plug a gap in the government’s finances. The deal was agreed in November. The sharp fall in oil prices has hit Kazakhstan’s economy hard shrinking growth rates and government revenues.
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(News report from Issue No. 262, published on Jan. 8 2016)
