Central Asian currencies jolted after nose dive in Kazakh currency rate

BusinessCentral Asian currencies jolted after nose dive in Kazakh currency rate

Breaking News: Central Asian currencies jolted after nose dive in Kazakh currency rate

By Agha Iqrar Haroon

   

There is breaking news from Central Asia that after nose dive of Kazakh currency, a wave of fear of economic meltdown has reached almost all neighbouring countries of Central Asia. Kazakhstan National Bank announced 19 percent devaluation of “Tenge”— Kazakh currency on February 11, 2014, reports Dispatch News Desk (DND). “Actually Central Asian currencies have already nose dived after Kazakhstan currency devaluation”, said money changers in local markets.

Currency devaluation will hamper imports and strongly impact Kazakh-China trade balance. Getting pulse from Kazakh marketing, Currency-exchangers in Tajikistan have stopped selling US dollars because situation is already affecting Tajik currency—Somoni that has already lost 3 percent of its value against the dollar since change of Kazakh currency rate.

Somoni

Meanwhile, situation has also jolted Kyrgyzstan and it is expected that Kyrgyz national currency—Som will also face impact and may go down. Kyrgyz Economy Ministry has already indicated that government is facing problems to sustain the value of its currency but did not mention any plan to devaluation of  Som.

The only currency that is stable in Central Asia is at the moment is Uzbek Som due to broader economical base.

Central Asian experts believe that poverty will increase in Tajikistan and Kyrgyzstan after this situation as both Central Asian countries are already weak economies and poor management system.

TAJIKISTAN
Investors have withdrawn about $4bn from emerging market stock exchanges in first month of 2014. There is no hope for investments in poor countries like Tajkistan and Kyrgyzstan while negative fluctuation in Russian currency can hamper bigger economy of Kazakhstan, claim Central Asian experts

Kyrgyz and Tajik economies are depending on tourism industry but Tourism not doing well in these two central Asian states as border conflicts among different countries are making international tourists shy to travel because tourists are facing acute problems when they wish to travel from one Central Asia country to another—for example from Tajikistan to Kyrgyzstan or from Kyrgyzstan to Uzbekistan. Since Uzbekistan has a huge base of aircraft flying and connectivity world, its tourism will remain growing while Kyrgyzstan and Tajikistan have very meager and limited international connectivity due to almost non-existing national carriers (Airlines). Moreover Kyrgyzstan and Tajikistan generally depending upon Nature tourism and Ecotourism and despite earning money they have failed to develop more products. No country survives with bad international connectivity, bad road infrastructure and fear of problems at cross border entry in international tourism market for longer period.

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