Analysis: it was quiet in currency market of Kazakhstan during the week - IRBIS

/IRBIS, Jan.28, 00/ - Trend that started as far back as in last week continued to develop in currency market of Kazakhstan from January 24 to 28. Activity of market operators were gradually decreasing. A balance settled down between the supply of U.S. dollars and the demand for them from both professional participants - banks of the second tier (BST) and their clients. The market for cash currency was not much different. It was also balanced as well. Short term liquidity of BST that lowered some because of tax payments has been completely restored by the beginning of the period. The banks did not lack free tenges during the week. However, unlike in the beginning of the year, currency positions of the BST were filled. Further increase of dollars in their assets was impossible (or undesirable for the banks). The market, with its usual end of January and February sluggishness, low spreads, absence of explicit trends of the dollar exchange rate, did not let the traders to hope for a big margin by working with the dollar. Attractiveness of the American currency, as a financial instrument, has declined. Banks gradually switched to state securities, increasing their investments into these papers, which is proved by a growing turnover of money in the secondary market for SS. Under the influence of these factors tenge to dollar exchange rate variation was minimal during the week. Tenge was inclined to firm a little bit: weighted average USD rate of the Exchange was decreasing at 2.6% APR. Last week tenge devaluation was 3.4% APR. The period was characterized by a sharp decline in turnover of the trades in U.S. dollars at Kazakhstan stock exchange (KASE), since the banks prefer to work outside of the Exchange floor when the market is balanced without paying commissions. Exchange market of the dollar was thin and volatile. However, weighted average rate of the Exchange maintained its representativeness by approximating the weighted average cost of the USD in interbank market as well. The latter began to "subside" during the week, activity was also falling here, though daily volume of deals quite often exceeded $10 mln. Assessments of the situation, short term forecasts of the dealers and that of the analysts coincide today. Both of them believe no active dynamics in the exchange rate of the U.S. dollar towards tenge will not be observed during the next few weeks. Most of them expect the dollar to fluctuate around 139.50 tenge for a quite a long time.