Kazakhstan banks to extinguish debts in difficult circumstances in 2009

/REUTERS, Almaty, Olzhas Auezov, Editor - Dmitriy Antonov, October 21, 08/ - Kazakhstan banks will not be able to obtain foreign refinancing for the upcoming maturity in 2009 of $12 bn. foreign debt because of the global credit crisis, but government support will help them fulfill their obligations, Anvar Saidenov, the head of the National Bank said on Tuesday. Kazakhstan's banking sector suffered from the global liquidity crisis, which began in the second half of 2007. Despite this, banks managed to refinance $7.5 bn. of the total of $10.5 bn. to be paid in the first half of this year. The following year, the volume of such refinancing will be unattainable. "Assuming a conservative approach, they must be forecast at zero" - said Saidenov. However, banks, which account for 45 % of total foreign debt of Kazakhstan in the amount of $100.6 bn., must fulfill their obligations, said the head of the National Bank, adding that the Central Bank and the government take measures to support the banking sector. On Monday the Government announced allocation of $15 bn. to support the deceleration of economy, saying that part of this sum will be provided by the National Bank to lower minimum reserve requirements. "We are talking about releasing of KZT200 to 400 bn. for banks," - said Saidenov. The volume of deposits of resident banks dropped by 0.2 % in September compared with the previous month. However, according to the National Bank, its volume for the first nine months of 2008 increased 30.6 %. According to Saidenov, the National Bank will increase capital fund to guarantee deposits by KZT70 bn. ($ 580 m.) to ensure greater security. The head of the National Bank has named unreasonable the increase in spreads on credit Swaps (CDS) for the debts of the Government and banks in Kazakhstan to the levels predicted imminent default. "The market (CDS) is illiquid, there are hardly any deals. I believe that it has no links to the real economic situation in the country" - said Saidenov. ($1 = KZT119.76). [2008-10-22]