Kazakhstan money market has set new record due to National Bank's statement

/REUTERS, Almaty, Tatyana Seroshtanova, November 8, 02/ - Trades volume at the day stock exchange's session in Kazakhstan on Friday exceeded the former maximum two times as much after the National Bank's head's statement about possible strengthening of tenge nominal rate relative to US dollar. "Today there was a very high volume. I see such the volume for the first time. Major reasons may be export currency proceeds and official statement of the National Bank's head that tenge strengthening is expected", - said one of Kazkommertsbank's dealers. Kazakhstan National Bank's head Grigory Marchenko said on Thursday at the press-conference that the probable scenario for money market in the nearest future will be strengthening of tenge nominal rate relative to US dollar due to large inflow of currency proceeds. "Scenario, by which tenge rate may strengthen, is not taken seriously by anyone. But situation in October has rather clearly shown that this is the objective reality, and if we continue to have the same inflows of means to the market, and the same excess of dollars, it is not excluded, that tenge rate will go on strengthening in nominal expression", - said Marchenko, having added that the National Bank considered keeping of price stability as its priority. "In case we have a strict dilemma, and we have to make low inflation, strengthening tenge at the same time, we'll do it", - he said after stock exchange's session ending. On Friday volume of trades at Kazakhstan stock exchange's (KASE) day session increased more than 20 times as much in comparison with previous trades to $87.945 m. Weighted average rate of Kazakhstan tenge rose to 154.40 for $1 from 154.46 at previous trades. Last deal was made at KZT154.37 for $1. "Today volume at the stock exchange is not just the highest but it exceeded the record volume 2 times as much The main factor, which caused the very high volume of dollar offer, is yesterday's speaking of Mr. Marchenko because not many people believed in the scenario of tenge strengthening in last two months ", - said the head of KASE's information and analysis department Andrey Tsalyuk. According to market participants' words, high price for oil, which is the main export product of Kazakhstan, caused lately significant inflow of proceeds. Domestic exporters refrained from selling of a part of accumulated currency expecting the further growth of dollar. "The falling began yesterday in the evening, but it was insignificant. Today since 10 o'clock in the morning, when stock exchange started working, everyone started selling dollars. Most probably National Bank purchased everything supporting the rate at 154.40, and then at 154.37", - said Kazkommertsbank's dealer. The sharp increase of dollar offer relative to demand, in dealers' opinion, could also be impacted by borrowing of syndicate loans by number of Kazakhstan banks, among which AMB, Nurbank and CenterCredit, to the total amount of $70 m. "There are two reasons: either syndicate loans or banks' long positions on dollar", - said a dealer of Citibank Nazar Toleubayev, having added that many banks preferred to close long positions on dollar. Market's participants say that on Friday the National Bank was not the only dollar purchaser. According to some data, some banks' purchases reached $18 m. Dealers can not forecast development of situation on current week, however the biggest part tends to idea that tenge strengthening towards US dollar will be the general tendency. "There may be some strengthening (of tenge), even judging on the fact that it was stated about. But most probably National Bank will stand its ground. I doubt that there will be significant strengthening", - assumed a treasurer of Alfa-bank Denis Ryltsev. [2002-11-08]