The state head against administrative regulations of rates on bank credits

/INTERFAX-KAZAKHSTAN, Astana, May 26, 06/ - The President of Kazakhstan Nursultan Nazarbaev stands against administrative regulations of bank credits rates. "We live in the conditions of free market. The state should not dictate private banks matters; the market itself sets refinancing rate. Here is a question - there will be offer, but demand will be absent - rates will keep falling then. Thus the state will purposefully carry out work on support providing for small and medium business by means of tax policy, which we are conducting now," - the president said on Friday, while answering the question of students of Eurasian university in Astana. In connection with this, the state head reminded about tax and other kind preferences for enterprise sector development, provided by the government. Together with the above, N. Nazarbaev noted that the state for the purpose of housing prices decrease will take several simulative measures, including the following, the funds will be provided for engineering communications creating, encourage development of renting housing sector and also individual housing construction. At present weighted average credit rate in national currency of commercial banks of the republic for physical entities totals about 19%, for legal entities - 13.5%, in foreign currency for physical entities - 17%, for legal entities - 16%. As it was informed, managing committee of National bank of Kazakhstan had increased refinancing official rate to 8.5% from 8% APR since April 1 of 2006, that was provoked by necessity of inflation pressure decrease in the republic. As it is known, that the government and National bank plan to undertake several antiinflation measures in coming future, that, in the opinion of some bank managers, will lead to credit rate increase for entrepreneurship by 1.5-2%. [2006-05-26]