Kazakh National Bank downs intervention in currency market
By Nigar Abbasova
The share of interventions by the Kazakh National Bank into the
country’s foreign exchange market
minimized in June 2016. The interventions of the bank in the form
of currency purchases in the reported period amounted to $ 2.5
million as compared to the rate of $728.3 million and $830.9
million in May and April 2016 respectively.
The fact is considered to be an indicator of the stabilization
on the country’s currency market.
The Bank started to implement interventions in the country’s currency market in February 2016. Earlier, interventions of the bank were implemented in the form of currency sale.
The volume of interventions in March totaled $1.236 billion while the rate in February was $474.4 million.
Daniyar Akishev, chairman of the country’s National Bank referred to the July interventions in the form of buying foreign currency as “practically a zero”.
Meanwhile, Kazakhstan’s international reserves, including gold and foreign currency reserves of the National Bank and National Fund assets, amounted to $96.2 billion at the end of June 2016, Times of Central Asia reported referring to the National Bank.
Foreign currency and gold reserves of the bank totaled $30.5 billion at the end of June 2016. The figure is considered to be the largest amount since July 2012. The assets of the National Fund amounted to $65.7 billion.
The value of tenge, Kazakh national currency began to decline after the joint decision of the country’s government and National Bank on the switch into the floating exchange rate in August 2015. As a result, the exchange rate dropped by half against the U.S. dollar during six months. In January 2016 the currency faced its lowest level at the rate of 383.91 of the USD.
The National Bank does not directly define the exchange rate but is eligible to resort to currency interventions should the financial system faces threats of destabilization.
The Bank has started to publish information on foreign exchange intervention and other transactions implemented in the monetary market of the country on its website on a regular basis since April 1. The decision is taken with the view of increasing transparency of operations in the monetary policy of the country.
The official exchange rate of the US dollar and euro to Kazakh tenge was set at 337.71 tenge and 372.56 tenge respectively on July 2016.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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