Tag Archives: Kyrgyzstan

Kyrgyz Central Bank to sell diamonds

NOV. 24 2015 (The Conway Bulletin) – The Kyrgyz Central Bank is spending so much cash trying to defend its som currency that it is considering selling off its stock of diamonds.

Tolkunbek Abdygulov, the Central Bank chief, said that the bank had already sold large amounts of gold and that silver and diamonds were next.

“We started selling gold this year, next year are going to add silver bullion to this and have discussed the options of even selling diamonds,” he said according to media reports. Mr Abdygulov didn’t say whether Kyrgyzstan held substantial diamond reserves or not.

The Kyrgyz Central Bank has intervened 22 times this year in the currency market. This week it spent another $7m defending the som which at one point fell nearly 5% to an all-time low of around 79/$1. After the Central Bank intervention it rose back to around 74/$1.

The Central Bank’s reserves have fallen from $2.2b at the start of the year to about $1.7b now.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Kyrgyz prison chief hangs

NOV. 20 2015 (The Conway Bulletin) – The warden in charge of the jail from which nine prisoners escaped last month has been found hanged in his cell, Radio Free Europe/Radio Liberty reported. Imankul Teltaev had been in pre-trial detention waiting for this trial on charges linked to the mass escape.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Russia-Turkey row splits Central Asia + S.Caucasus

DEC. 3 2015 (The Conway Bulletin) – Russia is piling pressure on its partners in the Eurasian Economic Union (EEU) to join it in blocking Turkish trade across the region, a move that could fracture regional alliances.

After a Turkish fighter-jet shot down a Russian fighter-jet over Syria last month, Russian President Vladimir Putin promised revenge. This included a ban on Turkish exports to Russia.

To tighten the ban, Mr Putin needs his allies in the EEU — Armenia, Belarus, Kyrgyzstan and Kazakhstan — to stop Turkish goods transiting through their territories into Russia. But it’s a clarion call which is likely to prove divisive for Central Asia and the South Caucasus where Turkey has strong cultural, trade and diplomatic links.

Of the EEU members, Belarus is a natural ally of Russia and will support Moscow. As will Armenia, which has strained relations with Turkey.

For Kazakhstan and Kyrgyzstan the issue is more complicated. They have good relations with both Turkey and Russia and will likely try to appease both sides as Kazakh foreign minister Yerlan Idrissov has said.

“Emotions are running high, but my president, knowing Mr Putin very well personally and knowing his great potential to be constructive and knowing personally (Turkish) President Erdogan, believes and hopes they will think strategically in this very difficult situation,” he told Reuters in an interview.

Outside the EEU, Turkey is likely to find more supporters. Turkmenistan sees Turkey as a natural ally and has been building up a rapport with Ankara while its relations with Moscow have worsened. It wants to pump gas to Europe and this means crossingTurkey.

With its 2008 war with Russia still fresh in the memories, Georgia naturally leans towards Turkey.

Azerbaijan, though, is Turkey’s biggest ally in the region. The countries are close culturally, politically and economically. Their militaries also often train together.

Although relations with Russia have improved over the past couple of years, it didn’t take long for Azerbaijan to rally to Turkey’s cause.

Azerbaijan cut by 20% cargo tariffs for Turkish trucks travelling from Baku across the Caspian to Kazakhstan and Turkmenistan, a move that will irritate the Kremlin and exacerbate regional tension.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)

Currencies: Kyrgyzstan’s som, Georgia’s lari

NOV. 27 2015 (The Conway Bulletin) — The only currency that moved substantially this week was the Kyrgyz som, which lost 2.3%, closing at 74/$1 on Friday.

The Kyrgyz Central Bank intervened heavily this week to prop up its currency, which looked like it was losing traction and could have spiralled downwards. During the day on Nov. 26, the exchange rate had surged to 77-79 som/dollar, which prompted the Central Bank to sell $7m in the currency market and enabled the currency to recover somewhat and move back to 74/$1.

Tolkunbek Abdygulov, the Central Bank chief, said this week the exchange rate was influenced by speculators.

All other currencies were stable.

In the South Caucasus, the Georgian lari maintained its level of 2.40/$1 and the Armenian dram was also stable at 480.8/$1.

In Central Asia, the Kazakh tenge floated at around 307/$1 throughout

the week. The Tajik somoni continued its gentle depreciation, and now trades at 6.7/$1.

The dollaruz.com website which monitored the Black Market rate for the Uzbek sum, appears to have closed.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Kyrgyz Imam sentence doubles

NOV. 20 2015 (The Conway Bulletin) – A court in Osh, Kyrgyzstan, doubled a jail sentence for Rashod Qori Kamolov, a Muslim Imam, to 10 years after an appeal by a local prosecutor. Kamolov was sentenced earlier this year for inciting religious discord. Kyrgyzstan and other coun- tries in Central Asia are wary of the spread of radical Islam.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Business comment: Eurasian Bank Council

NOV. 27 2015 (The Conway Bulletin) — Central Banks in the South Caucasus and Central Asia have had a rough year. Keeping up with the strengthening dollar and the falling rouble while monitoring inflation has been a tough test.

In an attempt to stick together during the economic downturn, some of the central bankers appear to have decided to use old infrastructure to continue their meetings and coordinate policies.

Confusion, however, clouds the various structures that are still in place.

The new body which met in Almaty this week was renamed the Eurasian Council of Central Bank Chiefs and is a spin-off of the now- defunct Eurasian Economic Community (EurAsEC).

It doesn’t overlap with the Eurasian Economic Union (EEU) because Armenia is not in it and is no longer representative of the old EurAsEC, which officially closed down last year, as Uzbekistan is not a member.

And this says a lot about just how confusing economic integration has been in the region.

Since the EurAsEC was disbanded, the Eurasian Economic Union (EEU) has become the integrationist body. Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia are part of the EEU.

So why brand it as EurAsEC? Why is Armenia out of the picture?

“Pressing economic questions” are the rationale behind this new body, according to Kazakhstan’s Central Bank.

The countries that form the new body are all in the midst of an economic crisis, but so are other countries that were not invited to the Eurasian banking council.

With the EEU in place and Tajikistan lined up to become a member, the decision to revive such a strange body, rather than another, is difficult to understand.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Kyrgyz police arrest IS recruiter at Osh airport

NOV. 18 2015 (The Conway Bulletin) – Police in Osh said that they had arrested a 19-year-man who was actively recruiting for the IS extremist group based in Syria and Irag.

Governments in Central Asia have been warning, increasingly shrilly it seems, that IS are recruiting more heavily from disaffected young men in Central Asia. IS has claimed responsibility for a series of attacks in Paris last week that killed last least 130 people.

“A young man has been sending recruits from Osh region to participate in wars abroad as part of terrorist organisations in Syria and Iraq with further intention of committing unlawful acts on the territory of Kyrgyzstan,” media quoted the ministry of interior as saying.

“He was also doing the financing, documentation and buying of tickets for recruits to countries of conflict zones.”

Police said that they arrested him at Osh airport as he was helping a recent recruit on his way to Istanbul and then on to Syria. They also said that they had found various fake ID cards, SIM cards and laptops on him.

There has been more than a trickle of recruits from Central Asia heading out to join IS, the most famous being a police chief from Tajikistan, but Western analysts have been disparaging of the image of Central Asia as a major IS recruiting ground.

A more established recruitment area for IS is in Moscow, where an economic downturn has cost Central Asian migrant workers their jobs.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Kyrgyz Central Bank buys som

NOV. 13 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank bought another $14m worth of som to steady its value at around 73/$1, highlighting the currency’s fragility. The Kyrgyz som, like other currencies in the region has lost about a third of its value this year.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Currencies: Kazakhstan’s tenge, Kyrgyzstan’s som

NOV. 20 2015 (The Conway Bulletin) — The Kazakh tenge was steady this week, trading at around 307.2/$1, off an all-time low against the US dollar of 311/$1 earlier in November.

There is still much speculation by analysts on just how monetary policy in Central Asia’s biggest economy is going to change under new Central Bank chief Daniyar Akishev. He said that inflation was too high and appeared to make this his priority.

With this in mind, expect another interest rate rise at the Central Bank’s policy meeting next month — if the policy wonks don’t cancel it again. There are, though, two urgent problems, it seems to me, with the Kazakh monetary policy. People don’t know what it is or whether it works.

The new key interest rate — overnight repo rates — was only introduced in September. It was raised in October to 16% from 12% and then ignored in November when the Central Bank cancelled its policy meeting at the last moment. Does this interest rate have any credibility? Does the market even care about it? It doesn’t appear to have had any effect so far.

And Mr Akishev appeared to acknowledge as much when he said that a fall in oil price would send the tenge tumbling further. Oil prices, outside the Kazakh Central Bank’s control, are the driver of tenge value and not its key interest rate.

In neighbouring Kyrgyzstan, the som currency did continue to set new records against the US dollar. It hit an all-time low on Friday of 72.5/$1 versus 71.9/$1 at the start of the week. On Oct 1, the som had been valued at 68.8/$1, meaning that it has lost over 5% of its value in the past seven weeks.

As the Bulletin reports in the main section of the newspaper, information coming out of Turkmenistan is that its manat currency has devalued and that the government has placed restrictions on the amount of cash people can withdraw from the banks. Earlier this month, The Bulletin also reported on the devaluation of the Uzbek soum.

Even staunchly controlled currencies are feeling the pressure, it seems.

And over in the South Caucasus, it is a similar story. Since its sharp 33% devaluation in February, the Azeri manat has been kept steady but analysts have increased chat of a need to devalue again.

Both the Armenian dram and the Georgian lari were steady through the week.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Kumtor posts upbeat Q3 results, boosting Kyrgyzstan

NOV. 18 2015 (The Conway Bulletin) — Canadian miner Centerra Gold said production and revenue at Kumtor, Kyrgyzstan’s largest gold mine, increased in the third quarter, countering continued low gold prices and giving the Kyrgyz economy a welcome boost.

Production grew to 3.2 tonnes of gold, up 9% from 2.9 tonnes in Q3 2014. This compared against relatively depressed gold prices meaning that Centerra’s revenues grew by 3%. Gold prices have fallen since the start of November by 6% to a six-year low of $34.37/gram.

In a statement on its website, Ian Atkinson, Centerra’s CEO, said: “Financially, the Company is in good shape with cash, cash equivalents and short-term investments of $537m or

$461m, net of debt, at September 30, 2015.”

Importantly for Kyrgyzstan, Centerra’s tax contributions also rose. In the first nine months of 2015, Centerra paid $98.7m, a 20% increase compared to 2014.

Centerra is the largest taxpayer in Kyrgyzstan. Output at the Kumtor gold mine makes up 10% of GDP.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)