FORECAST - dollar to fall next week

/REUTERS, Almaty, Tatyana Seroshtanova, August 22, 08/ - Active sales of Export proceeds active sales with the major Kazakhstan currency market operator National bank changing tactics - contributed to dollar depreciation, which may continue next week to KZT119.20 - 119.50, market participants say. "Tenge is growing on sales (dollars) of clients. Yesterday the major player started to buy dollars aggressively, which has been considered as change of current levels by most of players (KZT120 - 121 per $1), - a BTA Bank dealer said. Weighted average rate of Kazakhstan tenge on main exchange session on Friday grew to 119.75 per $1 from 119.96 a day before. The volume of Friday trades grew to $239.600 m. from $111.535 m. Considerable inflow of export proceeds from major Kazakhstan commodities - oil and metal - entailed dollar supply increasing on the market, which was converted by the companies for tax payments. "Rather huge volume of export proceeds appeared on the market. Banks sell big amounts of dollars for nearly a week, correspondingly dollar is decreasing as tenge is needed by our companies for budget, tax, project payments... and they sell export proceeds" - a Kazkommertsbank dealer said. The change of tactic of National Bank, which, according to some dealers, started to purchase dollar has been considered by players as a signal for national currency appreciation. "Two major factors contribute to tenge growth: the change of "long" positions of commercial banks for "short" positions and changing rules of game on the market by the major operator to tackle inflation. Sales of export proceeds contributed as well" - a Nurbank dealer said. According to the Statistics Agency, inflation in January - July 2008 grew to 6.6 % from 5.5 % for the same period of last year. Annual inflation (July 2008 to July 2007) grew to 20.0 % APR. According to dealers, overcoming of a "physiological" level in KZT120 per $1 has also appeared to be a sort of signal for testing new levels. "We think that dollar will be at KZT119.20 - 119.80 next week", - a BTA dealer said. According to some players, the market has revived a little after summer period. "I think the market is preparing to autumn" - the dealer of Nurbank said. "We forecast further dollar decreasing, but not lower than KZT119.50 per $1 with retaining of the current volumes" - a dealer Kazkommertsbank said. [2008-08-22]