Russia’s currency and bond rout is spreading to former Soviet states.
Currencies are tumbling after holding steady since Russian President Vladimir Putin annexed Crimea in March.
Russia’s deepening crisis and the ruble’s 34 percent slump over the past six months hurt economies that rely on remittances and imports from the country.
Georgia’s lari lost 10 percent against the US dollar last week, surpassing the 6.5 percent decline in the ruble as the biggest loser among 169 currencies tracked by Bloomberg.
The Armenian dram slumped 2.8 percent, the sixth weekly drop, the longest slump since March 2010.
In Kazakhstan, the country’s US dollar-denominated notes due in 2024 slid, sending yields up 57 basis points, or 0.57 percentage points, to 4.76 percent.
“Russian ruble weakness is now beginning to send tremors across the wider region,” Timothy Ash, an economist at Standard Bank in London, wrote in a note on Friday.
“These managed currency weakenings are only to be expected,” he wrote.
The lari reached 2.04 per US dollar on Friday, the weakest level since March 2004 on a closing basis, according to data compiled by Bloomberg.
Armenia’s dram tumbled to an eight-year low of 446.18 per US dollar.
The ruble fell to record lows this week, prompting Putin to warn of “harsh” measures to defeat speculators betting against the currency.
Kazakhstan may be the next to capitulate and allow its currency to fall as oil prices slump and the ruble weakens, even as policy makers have pledged to avoid devaluation, Ash said.
The central bank, which closely controls the exchange rate, devalued the tenge by 19 percent in February as the slumping ruble undermined the Asian nation’s export edge.
Russia’s economy is on the brink of recession after sinking oil prices battered the ruble and sanctions imposed by the US and its allies over the conflict in Ukraine stoked capital outflows.
GDP may shrink 0.8 percent next year, compared with an earlier estimate for 1.2 percent growth, according to the Russian Ministry of Finance.
Russia bought 12 percent of its imports from the Commonwealth of Independent States, which includes nine countries such as Armenia and Kazakhstan, data compiled by Bloomberg shows.
Neighboring countries include Ukraine, which accuses Russia of supporting armed rebels, and Georgia.
Georgian central bank Governor Giorgi Kadagidze told reporters on Friday that policy makers are ready to intervene in the currency market to prevent “large shocks.”
The countries’ ability to prop up their currencies is limited, Ash said.
Foreign reserves in Armenia fell to a five-year low of US$1.5 billion last month, while the stockpile in Georgia stood at US$2.4 billion, only enough to cover about three months of imports, according to data compiled by Bloomberg.
Renaissance Capital, a Russian brokerage, cut its forecast last week for Georgia’s economic growth next year to 4.3 percent from 6.3 percent, citing risks of slower exports and investment.
In October, the IMF forecast the Commonwealth of Independent States region, excluding Russia, would grow 4 percent next year, after expanding an estimated 2 percent this year.
With this year’s Semicon Taiwan trade show set to kick off on Wednesday, market attention has turned to the mass production of advanced packaging technologies and capacity expansion in Taiwan and the US. With traditional scaling reaching physical limits, heterogeneous integration and packaging technologies have emerged as key solutions. Surging demand for artificial intelligence (AI), high-performance computing (HPC) and high-bandwidth memory (HBM) chips has put technologies such as chip-on-wafer-on-substrate (CoWoS), integrated fan-out (InFO), system on integrated chips (SoIC), 3D IC and fan-out panel-level packaging (FOPLP) at the center of semiconductor innovation, making them a major focus at this year’s trade show, according
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
DEBUT: The trade show is to feature 17 national pavilions, a new high for the event, including from Canada, Costa Rica, Lithuania, Sweden and Vietnam for the first time The Semicon Taiwan trade show, which opens on Wednesday, is expected to see a new high in the number of exhibitors and visitors from around the world, said its organizer, SEMI, which has described the annual event as the “Olympics of the semiconductor industry.” SEMI, which represents companies in the electronics manufacturing and design supply chain, and touts the annual exhibition as the most influential semiconductor trade show in the world, said more than 1,200 enterprises from 56 countries are to showcase their innovations across more than 4,100 booths, and that the event could attract 100,000 visitors. This year’s event features 17
EXPORT GROWTH: The AI boom has shortened chip cycles to just one year, putting pressure on chipmakers to accelerate development and expand packaging capacity Developing a localized supply chain for advanced packaging equipment is critical for keeping pace with customers’ increasingly shrinking time-to-market cycles for new artificial intelligence (AI) chips, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said yesterday. Spurred on by the AI revolution, customers are accelerating product upgrades to nearly every year, compared with the two to three-year development cadence in the past, TSMC vice president of advanced packaging technology and service Jun He (何軍) said at a 3D IC Global Summit organized by SEMI in Taipei. These shortened cycles put heavy pressure on chipmakers, as the entire process — from chip design to mass
RSS