Kyrgyzstan’s economic week – May 7-12, 2018

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Ancient currency in CIS. This week the Kyrgyz national currency turned 25 years. The Kyrgyz som was first put into circulation on May 10, 1993. One of the participants in the introduction of the national currency of Kyrgyzstan, ex-chairman of the National Bank of the Kyrgyz Republic Marat Sultanov, speaking at a solemn event in honor of the 25th anniversary of the som, said that in the post-Soviet space the Kyrgyz som is the oldest currency.

He said that the som is famous not only for being the most ancient, but also for being the most stable and with low inflation.

"Nobody believed that the som would be so stable. In 1993, other countries warned us that with the introduction of som there will be nothing tomorrow from the country. But, we are prospering. We have the strongest currency," he said.

In connection with the jubilee, the official celebration of the 25th anniversary of the national currency has started in Kyrgyzstan. Chairman of the National Bank Tolkunbek Abdygulov, speaking at the National Philharmonic Society at a solemn meeting said that 25 years is an important milestone in the development of the National Bank of the Kyrgyz Republic.

More than budget of the country. Labor migrants last year transferred 2 billion 482 million dollars to Kyrgyzstan. This figure is higher than the indicator of the revenue side of the country's budget, economist Zhumakadyr Akeneyev, co-founder of the analytical center Pikir said.

He said that labor migrants from Kyrgyzstan support the country's economy, but they do not receive full support from the country. They face a lot of problems abroad.

Delayed gas pipeline. The Chinese side asks Kyrgyzstan to postpone until 2022 an agreement on the construction of a gas pipeline from Turkmenistan to China through the territory of Kyrgyzstan. Ulanbek Ryskulov, the chairman of the State Committee for Industry, Energy and Mineral Resources said that, in 2013 an agreement was signed between the Kyrgyz Republic and the People's Republic of China on the construction of a gas pipeline by 2016.

"But for different reasons this did not happen. And now the Chinese are asking for a postponement and they say that they will build it by 2022," he said. It is known that the estimated volume of gas from Turkmenistan has not yet been reached, which is why the construction was suspended. At the same time, the pipeline in Tajikistan is not yet under construction, which then must be connected to a part of a pipe in Kyrgyzstan in the Alai district.

Ryskulov said that the length of the gas pipeline across Kyrgyzstan is 215 km - along the Alai and Chon Alai districts.

Jubilee collections. The National Bank issued two collection coins in honor of the 25th anniversary of the introduction of the Kyrgyz national currency.

The first is the collection coin "25 years of the national currency of the KR", the second - the collector coin "Komuz".

GDP is growing, but slowly. The volume of the gross domestic product of Kyrgyzstan in the period from January to April of this year made about 133 billion soms, and increased by 1.3% compared to last year.

According to data of the National Statistical Committee, GDP growth was affected by an increase in volumes in industries producing goods and services. Their share in the GDP structure was 47%.

Agricultural products are in demand. In the period from January to April this year, an increase in output of agricultural products was observed in Kyrgyzstan by 1.7 %.

According to data of the National Statistical Committee of the Kyrgyz Republic, the increase in agricultural, forestry and fishery output was mainly due to the growth in livestock production, including livestock and poultry for slaughter in live weight by 2.1%.

Less investment in services. Since the beginning of this year, there has been a decline in investments in Kyrgyzstan in services sphere (construction of hotels, restaurants, etc.) and, conversely, an increase in the construction of social infrastructure.

According to data of the National Statistics Committee, along with this the decrease in the amount of financing, compared with the same period in 2017 was observed in the construction of facilities for the extraction of minerals, heat and electricity, as well as in the transportation and storage industry.

Dollarization is higher than desired. In Kyrgyzstan, there is a high dollarization in the foreign exchange market, independent consultant Vernar Hermann said at an international conference dedicated to the 15th anniversary of the introduction of the Kyrgyz national currency – the som.

Vernar Herman said that, one of the important moments is that today there is demand for the som.

"People use currency as a means of payment. There is dynamization. This is a good sign. But there is a fly in the ointment - a high level of dollarization. This is in all countries of Central Asia. And this shows that not all fully trust the som," he said.

Growth in trade. The volume of foreign trade turnover of Kyrgyzstan for the first quarter of this year amounted to $ 1 billion 560.2 million and increased by 19.7%. According to data of the National Statistical Committee, for the reporting period in 2018, compared to last year's indicators in foreign trade relations, there was an increase in imports of by 35.4% and a decrease in exports by 12.7%. Increase in the volume of import revenues is ensured by the importation of synthetic fabrics, footwear, communications equipment, as well as sunflower oil.

The decrease in export supplies, according to experts, is due to the reduction in the export of non-monetary gold, ore and concentrate of precious metals.

Jubilee of the som. Bishkek hosted an international conference dedicated to the 25-anniversary of the national currency of Kyrgyzstan – the som.

The event was attended by the chairmen of the National Banks of Georgia, Switzerland, Uzbekistan, and Kazakhstan. Russia is represented by the advisor to the chairman of the National Bank - the former chairman, the Armenian delegation is represented by the board members, the Czech Central Bank is represented by the members of the board, the deputy chairman of the Central Bank of Moldova arrived. In addition, a representative of the International Monetary Fund arrived.

The solemn part of the conference was opened by President of Kyrgyzstan Sooronbay Jeenbekov. The head of state noted the correctness of the decision to introduce in 1993 the own currency – the som.

Chairman of the National Bank of the Kyrgyz Republic Tolkunbek Abdygulov said that all the issues concerning the activities of the central bank were discussed.

"The activity of the National Bank of the Kyrgyz Republic includes the issue of the national currency, the maintenance of purchasing power and monetary instruments. At the last of the sessions it was discussed the question of what tools the central bank has, what history we went through and what the stages were, and the development of the National Bank as an institution of the central bank," he said.

With regard to monetary policy, according to Abdygulov, since the independence of Kyrgyzstan, the National Bank has presented tools used by world and central markets.

Kabar News Agency

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