Oil Pressure Azerbaijan, the other big former Soviet oil producer, has a more robust balance sheet, having been one of the fastest growing economies in the world over the last decade. But it is bound to be hurt as oil and gas projects get shelved. The Azeri currency, the manat, may fare better than the tenge. It has fallen only fractionally in recent months and authorities have a decent arsenal of reserves. But the pressure remains. They havent devalued before so the question is whether they will devalue now, said Efstathiou. There is a small chance, but I think Kazakhstan is much more likely. It is not just the oil producers that are in trouble. Former Soviet states without oil of their own to sell tend to be the ones that are still most dependent on trade and economic ties with Moscow: like Belarus, Armenia and Ukraine itself. Armenia relies on Russia for 80 percent of the remittances sent home by workers living abroad, a vital source of capital to fund a balance of payments deficit of 10 percent of GDP. Those workers are now earning devalued rubles. Belarus sends Russia half its exports. Even distant Uzbekistan, with no Russian border, sends a quarter of its exports there. No ex-Soviet country has seen its intimate economic relations with Russia more starkly exposed by the Ukraine crisis than Ukraine itself, which has been pushed to the brink of bankruptcy. Its hryvnia was one of the few currencies to fall more than the ruble last year, and is now hovering just off an all-time low, awaiting a decision from the IMF on a desperately-needed bailout. Ukraines economy has been hurt not just by the direct impact of war with Russian-backed separatists that killed more than 4,000 people, but by the loss of cheap Russian gas imports and damage to its own Russia-bound exports. Gas debt repayments to Russia and spending to support the hryvnia have more than halved Ukraines foreign currency reserves during 2014 to a 10-year low and left them under $10 billion, barely sufficient to cover two months of imports.
Posted on: Thu, 08 Jan 2015 12:52:28 +0000
Trending Topics
Recently Viewed Topics
© 2015