Home | Asset Prices | News & Global Markets | Research | Search

Kyrgyzstan & Uzbekistan News

This Section is contributed by Kazkommerts Securities

February 15, 1999

Latest Kazakhstan Weekly News

o On 13 February 1999, the National Bank of the Kyrgyz Republic set the official Som/Dollar exchange rate at 30.5845 per one U.S. Dollar. (Reuters)

o At a meeting with the National Bank staff held on 11 February, President Askar Akaev said that the National Bank should tighten its monetary policy and prevent a sharp devaluation of the Som. In 1998, the Kyrgyz national currency devaluated by 70%. "It seemed that a devaluation would be useful for Kyrgyzstan, but the results show that we've lost mightily," Akaev said. "We should be very cautious and guarantee a smooth exchange rate, " he added. (Reuters)

o Kyrgyzstan's National Bank will aim to keep inflation at about 20% in 1999, its Chairman, Ulan Sarbanov, said at a meeting with President Askar Akaev. He also set out the other main tasks for the bank: "…not to allow sharp fluctuations in the exchange rate of the Som; increasing the efficiency, reliability and the safety of the bank system; and setting up a system of deposit insurance."

Inflation in Kyrgyzstan grew to 18.4% in 1998, though it was planned at 10-12%. The GDP grew 2% in lieu of 6-7%. (Reuters)

o On 5 February 1999, the average yields on the 6^th issues of T-bills rose to 56.85% from 55.92% at the previous auction (on 28 January) for 12-month papers, and to 56.97% from 56.69% for 6-month papers. The average yield on 3-month T-bills dropped to 52.57% from 56.05%. (Reuters)

o On 3 February, Kyrgyz Prime Minister Zhumabek Ibrimov instructed the government to cut spending. According to him, government expenditures on transportation, equipment, services, and communi-cations exceeded the budget by Som 5 million (USD 167,000). Ministries, state agencies, and local administrations were similarly ordered to cut spending. Limits were also imposed on the use of mobile phones. (RFE/RL)

o Kyrgyzstan and Austria intend to adopt a large economic co-operation programme in spring 1999. The programme aims at developing the energy sector, light industry, and tourism. The relevant arrangements were reached during a visit of President Akaev to Austria in January. (Reuters)

o The Kadamzhay antimony plant, Kyrgyzstan's sole producer of the metal, hopes to resume production the second half of this year after it was stopped last autumn, the plant's director said to Reuters. The plant, situated in the mountains 700 km southwest of the capital Bishkek, had to halt production due to low world prices and the high cost of raw materials. The management of the plant has recently drafted contracts on shipments of raw materials from Kazakhstan and Tadjikistan and hopes that the Kyrgyz government will agree to arrange financing. (Reuters)

o On 2 February 1999, the Central Bank of Uzbekistan set the official Sum/Dollar exchange rate at 111.54/USD. (Reuters)

o Uzbekistan's GDP rose by 4.4% in 1998, compared with 5.2% growth in 1997. The information was released by the Deputy Finance Minister at a business seminar last week. It was also reported that Uzbekistan raised USD 1.2bn in foreign investment (about the same amount as in 1997), and that 70% of the investments were in projects guaranteed by the Uzbek government. According to the same source, inflation in Uzbekistan decreased to 24.0% in 1998 from 27.6% in 1997. (Reuters)

o At a business seminar held last week in Tashkent, Uzbekistan's Deputy Foreign Minister called on representatives of French business circles to activate investment in the Uzbek economy. The Minister cited the electricity, oil & gas, food processing, and construction industries as most promising for such investments. With respect to investment, Uzbekistan's policy is to support export-oriented industries based on processing local raw materials. In 1998, Uzbekistan's trade turnover with France totalled USD 172.8m, of which imports from France amounted to USD 156.1m. Uzbekistan mainly imports equipment from and exports cotton to France. (Reuters)

o Uzbekistan's national oil and gas holding company, Uzbekneftegaz, plans to implement three gas projects worth USD 180m with the participation of foreign investors, the company's chairman told Reuters. According to the chairman, a tender among foreign investors is currently being held to build a plant for the utilisation of flare gases at the Kokdumalak gas field. The participants include Japan's Mitsui & Co Ltd, Toyo Engineering and Britain's Petrofac. Two other projects provide for the construction of two recompression stations at the Zevarda and Shurtan deposits. Uzbekneftegas is presently negotiating on these projects with Sofregas (France), Mitsui & Co, Bateman (Israel), M.W. Kellog Company (U.S.), Dresser Rang (U.S.), and BCI (U.S.). (Reuters)