IRBIS analysts do not expect a significant growth of the dollar exchange rate

/IRBIS, Oct.26, 99/ - Last week on Kazakhstan stock market went on quiet. Events did not contradict with forecasts. As expected, the banks of the second tier were able to restore their short term liquidity completely, which was due to large volumes of state securities redemption and fulfillment of clients of the banks their payments to the budget for the third quarter. At the same time, growth of the dollar exchange rate on Friday was less than expected. Despite insufficiency of free tenge of the banks, dealers preferred notes of the National Bank to dollars. As in summer months, dollar lost its speculative attractiveness. Current short term trends of an American currency exchange rate changes got lower than the yields offered by state securities issuers. For this reason, in the second half of last week the banks and their clients made an attempt to reinvest almost all their money received from state securities redemption into notes of the National Bank. Only hard cut-off measures taken at the placement of indexed notes-14 on Friday prevented these plans to materialize. Summary of the week: obvious stabilization of the currency market and activation of the primary market for state securities, which indicates decreasing short term devaluation expectations of the dealers. By IRBIS specialists forecasts, liquidity of tenge in this week will keep increasing. As early as on Tuesday the dealers noted a sufficient volume of tenge on the market. Repayment on state securities on Thursday and Friday makes a large amount - 5,049.3 mln tenge (at 141.00 tenge per dollar), which can be hardly used in state securities placement sector. Taking into account this factor, it can be assumed, part of this money will be directed by the dealers to restore their currency positions despite the decrease of short term devaluation expectations, and therefore, pressure of tenge on the trade floor of KASE will increase. Some influence on increase of demand for dollars can have the statement of Grigori Marchenko on TV regarding the cancellation of mandatory sale of exporters' half earnings at KASE soon. This could boost devaluation expectations. On the other hand, weakening of tenge is prevented by inactivity of the market for dollars in cash where decrease of operations turnover and some prevalence of supply over demand are observed lately. Taking into account factors mentioned above, IRBIS analysts agree upon the dollar having a propensity for growth in this week, but the growth rate will be little. Noticeable growth is expected to happen on Thursday and Friday. Regarding the long run forecasts, the most impact will have the cancellation of mandatory sale of exporters' half earnings (if it takes place in next two months). Effects of this factor can remarkably change the conjuncture of the dollar market and will work against tenge. Another factor, which can impact the acceleration of the devaluation, is the repayment by the banks of the second tier syndicated loans received from various international organizations. By IRBIS data, main burden of at least $30 mln will fall in the second half of November. However, repayment amounts are not so large to have a severe impact on the conjuncture of domestic currency market.