How “Black Tuesday” in Russia threatens Kyrgyzstan?

Past Tuesday in Russia is named black. The ruble was going from pillar to post, like a hopeless drug addict. It jumped, sinking lower and lower, and no one counted anti-records.

Today the Russian national currency continued its march to the fall. None of the Russian Federation of Financial Analysts undertakes to predict what will happen tomorrow. And the Russians, who have bitter experience of the 1990s, rushed to get rid of rubles, buying in nearby stores everything that comes to hand.

In Kyrgyzstan politicized inhabitant is closely monitoring how low is ruble falling. And unlike specialists willingly discusses a hot topic.

24.kg news agency decided to ask the domestic economists how devaluation of the ruble will affect the Kyrgyz economy.

Tolonbek Abyrov, Doctor of Economics:

- The devaluation of the ruble negative impact on the Kyrgyz economy. Many of our people who work in Russia, have already experienced the negative effects of the depreciation of the ruble. Soon it will fall inside the KR. If previously there was a huge flow of transfers, now it reduced by 2-3 times. Naturally, in such circumstances, the Kyrgyz economy will have difficulties.

Shumkarbek uulu Adilbek, economist:

- One can see the positive and negative sides of this situation. The positive are that higher-quality Russian goods will be available. If we consider the negative side, I am concerned about the stability of our banking system. It is known that the majority of loans in the Kyrgyz Republic shall be repaid by money of migrants. In connection with the devaluation of the ruble this sector may have a problem. Migrants will send home less money, so the question of loan default arises. And it will cause social tensions. After all, banks don't care if ruble dropped or the dollar rose, they need to repay the loans.

Maksat Ishenbaev, former deputy chairman of the National Bank of the Kyrgyz Republic:

- The devaluation of the ruble in the Kyrgyz Republic has a negative impact, considering the fact that we want to enter the Customs Union in 2015. This will be additional pressure on the exchange rate of the som. I think that after the devaluation of the Russian ruble the tenge devaluation will follow. Kazakhs simply will be forced to devalue the tenge to save domestic production. This will create an additional burden on som. In addition, the decrease in remittances from migrant workers will affect the volume of international reserves of the National Bank.

Azamat Akeleev expert:

-Devaluation of the ruble will have negative affect on the overall global economy. This is particularly refers to those countries that have close trade with Russia. Kyrgyzstan has close relationship with Russia in terms of exports of goods and work of our citizens there. I fear that the crisis that is now observed in Russia will touch Kyrgyzstan as well. Our export is already suffering from depreciation of the ruble. Kyrgyz goods become more expensive in Russia, because we make calculations in dollars. In addition, much will depend on the situation in Kazakhstan. If Kazakhstan devalues its currency, pressure on som will increase.

Kubat Umurzakov, economist:

-Kyrgyz som doesn't directly depend on the ruble. Against the dollar, it stopped falling and rising to the ruble. The current situation shows that fall of the ruble doesn't affect dynamics of the som. But in general, Kyrgyz export becomes more expensive for the Russian market. But it is not time for panic. We should just wait for further developments.

Nasreddin Shamshiev, the head of macroeconomic policy department of the Ministry of Economy of the Kyrgyz Republic:

-Major part of economy of the Kyrgyz Republic is connected with Russia. Firstly, devaluation will affect income of migrants. Also, our products will become uncompetitive in Russian market. We trade in dollars, and expensive now in Russia. In addition, inflation expectations of the population will play its role. The uncertainty of the ruble exchange rate may affect the som. While the National Bank manages to keep its exchange rate. We switched to a floating exchange rate earlier and it gives the results.

Sergey Osavoluyk, the improvement of investment climate in the Kyrgyz Republic project manager, International Finance Corporation:

-Fall of the ruble will affect Kyrgyzstan as well as other countries, which are close to Russia and have economic ties with it. Devaluation of the ruble in Russia deprives competitiveness of those products that come from Kyrgyzstan. The money that comes from migrant workers, also devalued. A small number of our migrants work for dollars, but most still get salary in rubles. If earlier they could buy $3 for 100 rubles, now it is little more than one. In Kyrgyzstan they send remittances in US dollars, so the flow of money in currency decreases.

Aiylchy Sarybaev, the Doctor of Economics:

-Kyrgyzstan and Russia have their own economies. The state of the Russian economy can affect the KR only indirectly. There psychological factors will play the role. There may be a panic among the population, businessmen and workers. Also inflow of foreign currency in Kyrgyzstan will decrease significantly, as remittances from migrant workers will be reduced.