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Kyrgyzstan & Uzbekistan News

This Section is contributed by Kazkommerts Securities

September 15, 1998

Latest Kazakhstan Weekly News

o On September 12, the National Bank of the Kyrgyz Republic decreased the official Som/Dollar exchange rate to 21.4695. (Reuters)

o Speaking to the upper house of the Kyrgyz parliament on September 4, Kyrgyzstan's Prime Minister, Kubanychbek Jumaliev, said that the country's economic situation is stable. He noted that the GDP grew by 4.5% during the first eight months of 1998, and he predicted an annual inflation rate of 12% this year. Mr. Jumaliev admitted, however, that the Asian and Russian financial crises have adversely affected the national currency, the Som. He proposed banning financial transactions in U.S. dollars and mandating that all such transactions be only in the national currency. Jumaliev also informed lawmakers that the government will not implement a law, which was enacted earlier this year, that reduces land tax by 50 percent. He asked the parliament to amend that legislation. (RFE/RL)

o The Kyrgyz Legislative Assembly convened on September 8 to discuss amendments to the country's constitution proposed by President Askar Akayev in a Decree dated September 1. The major amendments include the introduction of private land ownership rights, changes in the number of parliament members, the cancellation of the parliament's right to amend the existing law on budget, and the abolishment of the immunity of a deputy. Only 25 of the 35 deputies attended the session, but of those, 21 rejected Akayev's proposals. In particular, the deputies voted against the introduction of private land ownership, saying it is still premature to adopt such a measure. They also objected to the proposal that a new government body, rather than the parliament, oversee financing for the parliament. The deputies suggested that in the October referendum on the proposed amendments, citizens be allowed to vote on each issue separately. (Reuters & RFE/RL)

o On September 10, the Ministry of Finance reduced the issued volumes of GKOs to 1 million Som from 2 million Som at the previous week's auction. The Minister of Finance, Talaibek Koichumanov, explained that the yields on 3-month, 6-month, and 12-month T-bills continue to be high. The yields on these papers were reported to have increased to 62.11%, 70.44%, and 83.27, respectively, last week. (Reuters)

o The Chairman of the National Bank, Marat Sultnov, has stated that the National Bank will continue pursuing a tough monetary policy with no administrative measures being taken to hold the Som. The Bank, however, raised the Lombard rate to 70% beginning September 1 and introduced a penalty of 0.1% of commercial banks' authorised capital for any violation of the NB's requirements. (Kyrgyz financial company Senti)

o The Pakistani brokerage house Gora Associated, Ltd has waved its membership in the Kyrgyz Stock Exchange following the move of Credit Swiss First Boston. The county's stock market is in stagnation and foreign brokers don't want to wait for better times. (Kyrgyz financial company Senti)

o Since September 8, the official Sum/Dollar rate of the Central Bank of Uzbekistan has been 104.00. (Reuters)

o According to its Ministry of Agriculture, Uzbekistan will produce around 4.16 million tonnes of cotton in 1998, well up from 1997's harvest of 3.70 million tonnes and the official state plan of 4.0 million tonnes. A total of 1.53 million hectares were sown to cotton this year, which is 30,000 hectares more than in 1997. Last year's cotton output of 3.7 million tonnes yielded 1.08 million tonnes of cotton fibre—Uzbekistan's main export commodity. (Reuters)

o Uzbekistan's Tashkent Chkalov Aeroplane Factory is offering a 25% stake for sale to either foreign or local investors. The factory has estimated the nominal price of the stake at USD 61.6m. Bids will be accepted until November 1 and the winner will be announced in December. The company has not excluded the possibility of selling the stake to several investors. Proposals to buy the stake have been sent to 15 foreign companies. These include British Aerospace and U.S.-based Boeing, Germany's Hobas AG and Wemex Handel GmBH, and also U.S.A.'s Citibank, the EBRD, and Russia's Inkombank. (Reuters)

o Canada's Cameco Corp will not participate in a large gold project in Uzbekistan due to unstable world prices for the metal, a company official told Reuters on Thursday, September 10. Uzbekistan has offered Cameco a 35% stake in the USD 355m gold venture. At the same time, Cameco is interested in producing other metals in Uzbekistan—in particular, uranium.

o Uzbek President Islam Karimov has signed a government resolution whereby the number of state officials will be reduced by 25% by January 1, 1999. (Interfax).