Finance - The Times Of Central Asia

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Sanctions

Kyrgyzstan Orders 50 Companies to Cease Activity Over Sanctions Risks

Kyrgyzstan has ordered 50 companies to cease activity after state agencies flagged them for sanctions risks, as Bishkek faces growing pressure over Russia-linked trade and payment channels. The move follows months of pressure from Western governments, which say some routes through Central Asia can be used to bypass sanctions imposed over the war in Ukraine. The Ministry of Justice did not name the companies, their owners, or their sectors. It also did not say whether any of them had direct links to Russia. The list was prepared by the Ministry of Economy and Commerce and other state bodies after checks into possible attempts to evade sanctions restrictions. The order was issued under an interagency mechanism for identifying dishonest participants in foreign economic activity and transactions with increased sanctions risks. The mechanism allows state bodies to use a simplified procedure to terminate the activity of legal entities after a formal submission. The Justice Ministry linked the move to efforts to protect the national economy from possible secondary sanctions. The European Union adopted its 20th sanctions package against Russia on April 23, less than a month before the Ministry of Justice order. The package added measures on energy, finance, trade, and crypto channels. It also used the EU’s anti-circumvention tool against Kyrgyzstan for the first time. Under that measure, the EU banned exports of computer numerical control machines and radios to Kyrgyzstan when there is a high risk that the goods will be re-exported to Russia. The Council of the EU said trade data showed a sharp rise in re-exports of common high-priority items through Kyrgyzstan to Russia. The EU treats the goods as sensitive because they can support industrial production, communications, and military-linked supply chains. The financial aspect of the sanctions has also reached Kyrgyzstan. The EU said it was targeting four financial institutions in third countries for circumventing sanctions or connecting to Russia’s financial messaging system. Local media identified Keremet Bank and Capital Bank as the Kyrgyz banks included in the package. The EU also designated a Kyrgyz entity that operates a platform where significant amounts of the A7A5 stablecoin are traded. Local outlets identified the entity as TengriCoin, registered in Bishkek, and linked it to the Meer platform. The pressure on Kyrgyz banks and crypto companies has been growing. The U.S. Treasury designated Keremet Bank in January 2025, saying the bank had coordinated with Russian officials and Promsvyazbank, a sanctioned Russian state defense lender, to support cross-border transfers. In August 2025, the UK government sanctioned Capital Bank of Central Asia, its director Kantemir Chalbayev, Grinex, Meer, TengriCoin, Old Vector, and other targets linked to Russian payment and crypto channels. London said the ruble-backed A7A5 token had moved $9.3 billion on a dedicated crypto exchange in four months. Kyrgyz officials have rejected the broader claim that the country helps Russia evade sanctions. The Foreign Ministry said on April 28 that Kyrgyzstan acts within national laws and its international obligations. It said Bishkek had supplied the requested documents to European partners...

Foreign Investment

Kazakhstan Finance Day in New York Showcases Market Reform, IPO Ambitions, and Alatau City Pitch

At Kazakhstan Finance Day in New York, officials and executives used the panel “Investment Opportunities in Kazakhstan” to present the country as entering a new phase of market development, citing macroeconomic stability, capital-market reform, potential initial and secondary public offerings, and infrastructure tied to the Alatau City project. The panel session was held at Citigroup headquarters in Manhattan and was moderated by Stephanie von Friedeburg, global head of Citi’s Public Sector Group. Speakers included Timur Suleimenov, governor of the National Bank of Kazakhstan; Adil Mukhamejanov, chairperson of the management board of the Kazakhstan Stock Exchange (KASE); Zhandos Shaikhy, deputy chairman of the management board of Baiterek National Managing Holding; Aidar Ryskulov, managing director for economics and finance at Samruk-Kazyna; and Bayan Konirbayev, deputy CEO and chief digital officer of the Alatau City Authority. Opening the event, von Friedeburg noted that the forum’s return to Citigroup headquarters for a third time reflected the continued engagement between Kazakhstan and U.S. investors. Kazakhstan’s ambassador to the United States, Magzhan Ilyassov, linked the event to growth in bilateral economic ties, citing more than $17 billion in commercial agreements signed during President Kassym-Jomart Tokayev’s November 2025 visit to Washington, and adding that further agreements were under consideration. The first financial presentation came from Suleimenov, who reported that Kazakhstan’s economy grew 6.5% in 2025, inflation had eased to 11%, and the National Bank remained committed to returning inflation to its 5% target. He framed the country’s investment case around tighter macroeconomic coordination, fiscal discipline, and financial-sector development. “We’re also exploring the development of a national crypto reserve framework, where digital assets will gradually be accumulated and managed as part of a sovereign reserve diversification strategy,” Suleimenov explained. He also pointed to continued work on the digital tenge and national digital financial infrastructure. Suleimenov connected that financial agenda to the investment case, arguing that Kazakhstan was reducing its structural dependence on oil revenue and moving ahead with legal and tax changes aimed at improving the investment climate. He described the Middle Corridor as increasingly important and called the route through Kazakhstan, the Caspian, and the Caucasus “the only viable, reliable route” between the East and West. [caption id="attachment_47460" align="aligncenter" width="1258"] Kazakhstan Finance Day in New York; image: K. Krombie[/caption] The discussion then moved to Samruk-Kazyna’s finances and privatization plans. Aidar Ryskulov put the fund’s assets under management at $88 billion and EBITDA at $10.8 billion. He indicated that the fund intended to remain active in international debt markets this year. Ryskulov stated that Samruk-Kazyna was targeting a public-market transaction this year, with London, Hong Kong, and Astana under consideration, although timing would depend on macroeconomic conditions. He later pointed to IPO plans for the national railway company, Kazakhstan Temir Zholy (KTZ). "Our capacity is roughly 55 million tons, and we’re going to double this capacity in five to seven years,” he said. Ryskulov also characterized Kazatomprom as “one of the best assets” and presented it as undervalued and a high-dividend company. Zhandos Shaikhy focused on Baiterek’s scale and...

Banking

Kyrgyz Banks Hold $1.3 Billion in Liquidity, but Businesses Lack Long-Term Financing

Kyrgyzstan’s banking sector holds a substantial volume of liquidity, yet small and medium-sized enterprises (SMEs) continue to face a shortage of development financing, according to a report by the Asian Development Bank. The ADB estimates that the system has accumulated around $1.3 billion in excess liquidity. At the same time, more than 45% of bank loans, and a similar share of microloans, are directed toward consumer needs, while lending to industry has steadily declined. Representatives of the banking sector say they are familiar with the report’s findings but consider them only partially accurate. “Commercial banks in Kyrgyzstan do indeed have sufficient funds, but the bulk of these deposits are short-term. The figures mentioned in the report mainly refer to balances on corporate accounts that are not time-bound, they are demand deposits and can be withdrawn at any moment. As for long-term funding for large-scale projects in industry and agriculture, banks lack such resources,” Anvar Abdraev, President of the Union of Banks of Kyrgyzstan, told The Times of Central Asia. According to Abdraev, this helps explain the perception that banks are reluctant to lend to industry and SMEs. He added that large businesses generally do not face financing constraints, as they tend to secure funding from international financial institutions and intergovernmental funds on concessional terms, often bypassing commercial banks. Banking sector representatives also point to structural challenges on the borrowers’ side, including underdeveloped business plans, which increase credit risk. In addition, a significant share of applications comes from startups, which banks classify as high-risk projects. Another limiting factor is the lack of sufficient liquid collateral among entrepreneurs. Banks also emphasize that non-performing loans in their portfolios are maintained at around 5-6%, prompting stricter borrower assessment criteria. As a result, the loan approval process for businesses can be lengthy, and rejection rates remain high. “The growth rate of consumer lending does indeed exceed the volume of loans directed toward business development. This is primarily because consumer loans are much easier to obtain today. This has largely been made possible by new banking technologies. Consumer loans can be issued online using remote identity verification. Moreover, the average size of such loans is significantly smaller than that of business loans,” Abdraev added. Thus, despite the high level of liquidity in the banking system, the shortage of long-term funding, combined with borrower-related risks, continues to constrain lending to Kyrgyzstan’s real sector.

Cultural Heritage

Bukhara Demolitions Resurface as Developer Faces Financial Trouble

Concerns over demolition works linked to the “Eternal Bukhara” tourism project have resurfaced following renewed questions directed at Uzbekistan’s Cultural Heritage Agency, as the project’s main developer faces financial difficulties. In 2024, The Times of Central Asia reported that construction of the large-scale tourism complex near the historic center of Bukhara had drawn criticism from local residents and UNESCO. The project, located in the buffer zone surrounding the ancient city, was seen as a potential threat to the integrity of one of Central Asia’s most significant cultural sites. According to Uzbek outlet Uzdiplomat, the issue was raised again during a recent briefing, where journalists questioned officials about the consequences of last year’s demolitions. The project’s main investor, Enter Engineering, has since encountered financial problems and is reportedly selling assets to repay debts to banks, the government, and employees. While construction has slowed, concerns remain over the damage already caused to the cultural environment. The demolitions carried out in 2024 sparked strong reactions from the public, architects, and international organizations. Several buildings, including administrative and social facilities in central Bukhara, were reportedly demolished as part of preparations for the tourism complex. At the time, international heritage group Alerte Héritage called for a halt to the process, arguing that it could contradict global preservation commitments. Responding to questions, a representative of the Cultural Heritage Agency said the works were conducted outside UNESCO’s core protected area and instead took place in the buffer zone. According to the agency, all required documentation, including a master plan and impact assessments, was submitted, and UNESCO was informed of the process. Officials also addressed criticism over the demolition of buildings that, while not officially listed as cultural heritage, were considered by some to have historical value. Deputy head of the agency Tursunali Kuziyev said the agency can only intervene in cases involving officially registered heritage sites. He added that granting such status requires a formal scientific review and legal procedure. Questions about whether the agency could take a broader stance in defense of the public interest were met with similar responses. Officials reiterated that decisions regarding non-listed buildings fall under the authority of local governments and urban planning bodies.

Finance

Kazakhstan’s Central Bank Links Tenge Strengthening to Rising Oil Prices

Governor of the National Bank of Kazakhstan, Timur Suleimenov, has attributed the recent strengthening of the tenge to rising global oil prices, which have increased export revenues and boosted the supply of foreign currency on the domestic market. According to the regulator, the tenge appreciated by 3.9% in March, reaching 478.15 KZT to the dollar. The average daily trading volume on the Kazakhstan Stock Exchange increased from $335 million to $372 million, while total trading volume reached $6.7 billion. Currency sales from the National Fund totaled $400 million, supporting transfers to the state budget. In addition, approximately $391 million was supplied through the mandatory sale of foreign currency earnings by quasi-state sector entities. No foreign exchange interventions were conducted during the period. As a result, the National Fund accounted for about 6% of total trading volume, or roughly $22 million per day. Exporters remained the primary source of foreign currency supply, Suleimenov noted. “Kazakhstan’s main export is oil. Prices are rising, volumes remain unchanged, and accordingly, export revenues and currency supply are increasing,” he said. Preliminary estimates indicate that National Fund currency sales in April will total $300-400 million, broadly in line with March levels. Suleimenov also said the tenge remains stable despite earlier forecasts by some analysts suggesting a potential weakening to 1,000-2,000 KZT to the dollar. At the same time, he warned of inflationary risks linked to rising tariffs. According to him, the government plans to factor inflationary pressures into future adjustments of utility and fuel prices. As of April 1, the moratorium on increases in utility and fuel tariffs in Kazakhstan, introduced in October 2025, has expired. The Times of Central Asia previously reported that economist Aidarkhan Kusainov had suggested the tenge could weaken to 1,000 per dollar or even further, arguing that the national currency is overvalued.

Economy

Kyrgyz Citizens Are Spending More and Saving Less

The financial habits of Kyrgyz citizens has changed significantly in recent years: people are spending more and saving less. This conclusion was reached by the country's National Statistical Committee. According to the agency, the share of household savings has more than halved, from 24.3% of income in 2020 to 10.8% in 2024. Until 2021, however, Kyrgyz citizens had shown a tendency to save. This contributed to the growth of banks’ deposit bases, and the authorities noted increasing confidence in the financial sector. Formally, this confidence remains, but household behavior has changed. In 2024, the country’s gross disposable income amounted to approximately $20.5 billion, of which roughly $18.2 billion was directed towards consumption. A significant share of economic activity is therefore effectively geared towards meeting current domestic demand. This trend coincides with a period of strong economic growth that the authorities have described as a “leopard’s leap.” In recent years, GDP growth has reached about 10% annually. Economists say domestic demand remains the key driver of growth. The construction sector is expanding, mortgage lending is increasing, and infrastructure projects and gold mining continue to develop. Another indicator of changing behavior is the rise in household consumer spending. Its share increased from 75.4% of GDP in 2020 to 86.9% in 2024. At the same time, statistics show so-called negative savings, meaning that the population is spending more than it officially earns. In practice, this reflects the active use of loans and other external sources of financing. The banking sector and the State Mortgage Company (SMC) play a key role in this process, supporting consumption and thereby stimulating economic growth. Despite continued economic expansion, according to official data, GDP increased by 8% in January-February 2026, analysts warn of potential risks. The decline in savings means households have fewer resources to build a financial “safety cushion.” With incomes largely directed towards current consumption, their resilience to economic shocks is weakening.