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 Central Asia Pays the Price for Russia's Tumbling Ruble - The Guardian

Sharp decline in the value of Russian currency is hitting Kyrgyzstan, Tajikistan, and Uzbekistan’s economies hard.

Censor.NET reports citing The Guardian.

Pensioner Jyparkul Karaseyitova says she cannot afford meat anymore. At her local bazaar in Kyrgyzstan's capital, Bishkek, the price for beef has jumped 9% in the last six weeks.

She is not alone in feeling the pain of rising inflation. Butcher Aigul Shalpykova says her sales have fallen 40% in the last month, the article says.

Read also: EU Sanctions on Russia to Have Modest Impact on Europe's Economy But Hit Russia's Growth Rate Harder

A sharp decline in the value of Russia's ruble since early September is rippling across Central Asia, where economies are dependent on transfers from workers in Russia, and on imports too. As local currencies follow the ruble downward, the costs of imported essentials rise, reminding those living here just how dependent they are on their former colonial master.

The ruble is down 20% against the dollar since the start of the year, in part due to western sanctions against Moscow for its role in the Ukraine crisis. The fall accelerated in September as the price of oil - Russia's main export -dropped to four-year lows. The feeble ruble has helped push down currencies around the region, sometimes by double-digit figures.

In Bishkek, food prices have increased by 20 to 25% over the past 12 months, says Zaynidin Jumaliev, the chief for Kyrgyzstan's northern regions at the economics ministry, who partially blames the rising cost of Russian-sourced fuel. This month the International Monetary Fund (IMF) said it expects consumer prices in Kyrgyzstan to grow eight per cent in 2014 and 8.9% in 2015, compared with 6.6% last year. Kazakhstan and Tajikistan should see similar increases.

The one country unlikely to feel the pressure is Turkmenistan, which is sheltered from the market's moods because it sells its chief export - natural gas - to China at a fixed price.

The region is also vulnerable to policy shifts by Russia's Central Bank, which has already spent more than $50bn this year defending the ruble. Some Russians, including former finance minister Alexei Kudrin, have condemned efforts to prop up the currency, arguing that a weaker ruble is good for exports.

Read also: Russia's Ruble Hit New All-Time Low

 
 
 
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