Tengrinews TV Радио Tengri FM Радио Жұлдыз FM Laws of Kazakhstan
KZ RU EN
Write us +7 (727) 388 8020 +7 (717) 254 2710
искать через Tengrinews.kz
искать через Google
искать через Yandex
USD / KZT - 332.70
EUR / KZT - 389.99
CNY / KZT - 49.72
RUB / KZT - 5.59

CU single currency noncompetitive because of Kazakhstan and Belarus

03 march 2014, 10:27
0

Commenting on the possibility of creation of a single currency in the Customs Union and establishing a common emission center once the Eurasian Economic Union is created, experts from Russia and Kazakhstan says that the currency will be less competitive than even the Russian ruble because of the weakness of the economies of Belarus and Kazakhstan compared to that of Russia, Tengrinews.kz reports citing Kursiv.kz.

After there Kazakhstan banks came under an information attack (a buzz was created urging people to withdraw money from Alliance Bank, CenterCredit Bank and Kaspi Bank because of their allegedly imminent failure), some of the industry analysis assumed that forces from Russia could be behind the campaign to promote the idea of establishing of a common emission center and introducing a single currency for the three countries of the Customs Union - Russia, Kazakhstan and Belarus. The wave of campaign-driven speculations is almost gone, but the question of single currency in the CU still remains.

Financial analyst from Investkafe Timur Nigmatulin believes that even if the Eurasian currency is eventually created it will be less competitive than even Russian ruble, because of the weakness of Kazakhstan and Belarus economies.

Timur Nigmatulin. Photo courtesy of spbit.ru

Timur Nigmatulin. Photo courtesy of spbit.ru

The point is that the economy of Belarus is subject to risks of government involvement and non-market methods of regulation. While, Kazakhstan's economy excessively relies on raw materials. With the constantly growing government expenditures and population's demand for imported commendations, Kazakhstan's economy is experiencing a sharp reduction of surplus of the balance of payments.

With Russia's economic growth rate down to 1.3% in 2013, introduction of the single currency can as well drag Moscow to the bottom.

Senior fellow at the Kazakhstan Institute of Strategic Researches Vyacheslav Dodonov believes that introduction of the single currency in the Customs Unions is unfeasible and can be counterproductive for the Eurasian integration.

Vyacheslav Dodonov. Photo courtesy of time.kz

Vyacheslav Dodonov. Photo courtesy of time.kz

Financial analyst of Finam investment holding Anatoly Vakulenko has an opposite opinion. He thinks that a single currency has got both sense and prospects for the Eurasian Economic Community (EurAsEC). But he doesn't not expect much progress in this project in the forceable future.

According to the Director of the Analytical Department of Alpari company Alexandr Razuvayev, the single currency could be bolstered by the Russian and Kazakhstan raw materials export and Russian forex reserves that make nearly $500 billion. Since Russia's economy is far larger than those of Kazakhstan and Belarus, the value of the single currency would be pretty closer to Russian ruble. The nominal GDP of Russia makes $2 trillion per year, Kazakhstan's GDP equals $200 billion and Belarus has a GDP of $65 billion a year.

Alexandr Razuvayev. Photo courtesy of kursiv.kz

Alexandr Razuvayev. Photo courtesy of kursiv.kz

Razuvayev believes that in general the idea of a single currency is a good one, and the sooner such currency appears the better: "It will consolidate the business connections. Businessman and common citizens will know that they loose no money exchanging currencies and paying various bank commissions. In terms of macro economy, it is impossible to create a common market of goods and services in the Customs Union member-countries without a single currency," he said.

Speculations about the single currency in CU have been in and out of focus since 2012. There is a common expectation that creation of the Eurasian Economic Community in January 1, 2015 could be a signal for introduction of a single currency that would allegedly be called 'altyn' and issued by the Joint Eurasian Center Bank based in St. Petersburg. Leaders of the CU member-countries generally support the idea of a single currency. The National Bank of Kazakhstan has not precluded the possibility of its introduction either. However, the idea has not gone any further than just talk so far.  

Photo courtesy of customsunion.kz

Photo courtesy of customsunion.kz


Нравится
Поделиться
Add comment
Most Read
Most Discussed
Today
Week
Month