Kazakhstan Central Bank Governor on sanctions against Russia and integration efforts
May 19. Tengrinews
The economic sanctions introduced by Western countries against Russia do not have any impact on Kazakhstan’s readiness to proceed with integration processes within the Eurasian Economic Space and further boost cooperation between Astana and Moscow, Newskaz.ru reports, citing Kairat Kelimbetov, the Central Bank Governor as saying May 19 at a press conference in Almaty.
“Kazakhstan’s stance is very clear: sanctions come and go, whereas long-term strategic partnerships are here to stay for a long time. Kazakhstan and Russia have always enjoyed a strategic alliance. When it comes to partnerships, we are in line with the schedule set by the joint negotiations groups and the Eurasian Economic Committee”, he said.
When asked about competition between Kazakhstan and Russia in certain sectors, Mr. Kelimbetov answered that “the two nations enjoy many invisible ties that have been bringing the two nations closer rather than intensifying competition”.
“Let us keep in mind that Kazakhstan is a land-locked country, so major transit and logistics solutions are only possible across Russia’s territory, including towards Europe. And the Russian market alone is a huge opportunity for Kazakhstan. The West Europe – West China route runs across Russia, as well as other routes”, he said.
Mr. Kelimbetov reminded that the Kazakhstan’s Program of Accelerated Industrial Development was formulated with the Russian market among other factors in mind. “Who needs Kazakhstan-made railroad engines and railway cars if Kazakhstan is unable to sell them to Russia?”, he asked.
“For the mentioned reasons, I don’t believe the sanctions are somehow stopping us from putting in place all the integration platforms (…) the Russian rouble did tumble, but now it has come back to some equilibrium point. All of this enables us to cooperate and does not pose any significant problems”, he summed up.
* * *
Central Bank Governor on National Oil Fund
May 19. Tengrinews
The current state of the global and Kazakhstan’s economy enables Kazakhstan to solve investments-related issues without decreasing the country’s international reserves, including gold and FX reserves of the Central Bank and assets of the National Oil Fund,Newskaz.ru reports, citing Kairat Kelimbetov, the Central Bank Governor as saying May 19 at a press conference in Almaty.
The National Fund of Kazakhstan was created in 2000 as a stabilization fund that accumulates windfall revenues from oil sales and ensures the economy of Kazakhstan will be stable against the price swings of oil. The assets of the National Fund assets are monitored by the National Bank of the Republic of Kazakhstan.
As of April 1, 2015 Kazakhstan’s international reserves stood at $98.8 billion, including $29.1 billion in gross gold and FX reserves of the Central Bank and $69.7 billion in assets of the National Oil Fund.
“We have calculated that with the oil price standing at $55 per barrel we are not tapping into the National Oil Fund. The flows into the National Oil Fund are positive even with the oil price at $55 plus per barrel”, he said.
Mr. Kelimbetov reminded that during the crisis of 2008-2010 the Central Bank’s gold and FX reserves coupled with the assets of the National Oil Fund only stood at $50 billion, whereas by the end of 2014 the figure had grown by $100 billion. “The anti-shock cushion is twice bigger now. We can state that even during this tough period we are not decreasing the National Oil Fund worth about $70 billion”, he said.
“As instructed by President Nazarbayev, in 2015-2017 $3 billion will be spent annually to bolster the country’s economic growth through infrastructure development and support to small and middle-sized businesses”, he said.
* * *
Kazakhstan is more upbeat over economic prospects amidst positive news from Russia
May 19. Tengrinews
The much-awaited Russia’s economic upturn enables Kazakhstan’s Central Bank to be more upbeat over the Kazakhstan’s economy growth, Newskaz.ru reports, citing Kairat Kelimbetov, the Central Bank Governor as saying May 19.
“We are expecting the Russia’s economy to recover in the Q3 and Q4, which is good news for all of us as the economic climate in the entire region depends on Russia’s economy growth capabilities”, he told at a press-conference in Almaty, Kazakhstan’s biggest city, today.
“We believe that with the current prices for oil standing at $55-60 per barrel, the Kazakhstan’s economy growth figure will stand at over 2% rather than at 1.5% (as was earlier estimated)”, Mr. Kelimbetov said.
He reminded that the Central Bank had earlier estimated the inflation rate would make up 5-8% at the end of the year. According to the current estimates made by the Bank’s experts, the figure is likely to stand at 5%.
“We believe there have been some positive changes made, which was possible through the great effort taken in the Q4 of 2014 and the Q1 2015 by the Russian Government and the country’s Central Bank, including inflation targeting efforts (…) Today Russia is expecting to bring the earlier estimated inflation rate of 17% to 11%”, he said.