Head of National Bank: Commercial banks need less and less liquidity support

/INTERFAX-KAZAKHSTAN, Astana, May 19, 08/ - Actuality of provision of additional liquidity to commercial banks decreased, Anvar Saidenov considers, the Chairman of National Bank of Kazakhstan. "Necessity in providing banks with liquidity decreased. Though, we expand the range of instruments, which allow banks for using repo operations in a more flexible way" -he said on the meeting of state commission on economic modernization in the government on Monday in Astana. In particular, according to his words, the bonds of national companies and banks, issued before May 1 this year and also bonds of Kazakhstan Mortgage Company are included in the list of instruments, which are used as a loan. "On the whole, the situation is under control and in case there is a necessity to provide banks with liquidity, it will be provided" - the Chair of National Bank underlined. A. Saidenov also marked that despite of the reducing volumes of foreign debt and limited volume of deposits, Kazakhstan banks credit activity hasn't stopped. "For January-March the economic debt on banks credits is rather stable and is evaluated as the level of KZT7 trl. 256 bn., i.e. new credits are granted within the credits that maturated by those given earlier" - he said. The current - 120.70/$1. At the same time, the head of National Bank pointed out changes in the structure of given credits. "Thus, the stake of credits in construction increased in March 2008, compared to July 2007: growth from 16.2% to 17.6%. The stake of credits in industry increased for the same period - from 9.2% to 9.5%. But the stake of credits in trades and agriculture reduced" - A. Saidenov stated. Besides, he claimed that the main priority of the National Bank activity remains to be restriction of inflation, control of prices, and financial stability. "We don't reduce the rate of refinancing, which makes 11%, we still withdraw money from the economy, but only in restricted limits, and also take deposits from commercial banks. As on May 16 this volume makes approximately KZT80 bn." - A. Saidenov marked. Besides, the Chairman of the State Agency for Financial Supervision (AFS) Elena Bahmutova informed at the meeting, that the level of commercial banks' liquidity "remains on rather sound level". According to E. Bahmutova, consolidated ratio of current liquidity as of May 1 made 1.44 % "at minimal rate for separate bank - 0.3 %, ratio of short term liquidity makes more than 1 %, at minimal amount - 0.5 %". "In other words, liabilities with 3 months term of maturity are covered totally, there can't be any problems in 3 months perspective" - she said. At the same time, the head of AFS marked the growth of stake of liquid assets. "As of May 1, it made 14 %, though at the beginning of the year this indicator made 13.9 %, - she underlined. - Thus, banks have enough resources both for conducting of its external liabilities and for crediting of economy, no doubt, with consideration of the risks of loaners, existing for the current moment". According to her words, after reviewing credit priorities, banks increase the stake of high-reliability liquid assets. "In particular, they renewed offering of deposits on National Bank's account, which says that, these resources can be directed to crediting of economy at any time" - E. Bahmutova remarked. [2008-05-20]