It appears that the Russian-led Eurasian Customs Union is having the exact same kind of growing pains that the EU is still having, in that lack of a common monetary policy is causing all sorts of frictions. The news from Astana this morning is that the Kazakh authorities have undergone an immediate 25% devaluation of the currency (the tenge). The announced reason has to do with competitiveness in the Customs Union, which makes sense, since Russian monetary authorities have let the ruble plummet fairly quickly in 2014. Whether this signals a new round of beggar-thy-neighbor devaluations across emerging markets is tough to say, but it does show that the vaunted Customs Union, the one that Russia is paying Ukraine to think about joining, still has a lot of issues... and that Kazakhstan can't be rolled like Ukraine or Belarus as easily.
Dr. Christopher Hartwell is an institutional economist and President of CASE Warsaw. All commentary on this page is exclusively his own and in no way represents the views of CASE, his wife, his dog, or anyone else. Especially not his wife or his dog.