Participants of the Kazakhstani financial market decided to create an indicator of interbank deposit market similar to LIBOR

/IRBIS, July 24, 00/ - On July 11, 2000, professional participants of the Kazakhstani financial market, such as major banks, made a decision to create a generally accepted indicator of interbank deposit market in Kazakhstan, which could be the Kazakhstani analogue of LIBOR based on its computation method. For this purpose Memorandum on creation of interbank deposit market indicator (Memorandum) was developed. The participants of the Memorandum commissioned Kazakhstan stock exchange (KASE) with collection of the deposit rates from the participants of the project and computation of the indicator. The participants of the Memorandum are voluntarily assuming the obligations to put out bid and offering rates for all deposits, specified by the Exchange council, in the trade system of KASE. The process of putting out the quotations and the computation method of the indicators are regulated by a new internal document of KASE "Interbank deposit market indicator creation method" (Method). The list of the banks, whose quotations are to be used as the basis of the indicator, will be determined by the Exchange council of KASE, after examining the reputation of the bank and its activity on the deposit market. In order to participate in the creation of the deposit market indicator the bank has to sign the Memorandum. Following banks have been already determined and joined the Memorandum: Bank TuranAlem OJSC, CITIBANK KAZAKHSTAN CJSC, Halyk Bank of Kazakhstan OJSC, Bank CenterCredit OJSC, Subsidiary bank ABN AMRO Bank Kazakhstan CJSC, KAZKOMMERTSBANK OJSC, Almaty merchant bank CJSC, Demir Kazakhstan Bank OJSC, Eurasian bank CJSC, TEMIRBANK OJSC. Standard deposit terms and types of currencies, which will be used to create the indicator, are determined by the decision of the Exchange council of KASE. The indicator creation method is as follows. Till 4:00PM Almaty time in the trade system of KASE each admitted participant puts out its own indicative quotations on standard deposit terms, which have to include attraction rate, offering rate and corresponding attraction and offering volumes. The minimal volume of a particular quotation should not be less than KZT15 mln. The quotations put out by the participants of the Memorandum are indicative, that is they do not oblige the participant to make a deal on the terms set in indicative quotations. The quotations should be put out by the participant in decimal mode with not less than two decimal place and not more than six place accuracy depending on the currency of the deposit. The fixing of rates are made by the KASE daily based on the rates of the participants as of 4:00PM Almaty time. The rates set by the participants are arranged in ascending (descending) order, maximum and minimum values are rejected, and the remaining values are used to calculate arithmetic average. This average rate will be the indicator for corresponding fixing term and date. The Exchange plans to create three indicators. - KIBOR - average of offering rates; - KIBID - average of bid rates; - KIMEAN - average of bid and offering rates. The participants of the Memorandum are expelled by force by the Exchange council of KASE in following cases: - the participant put out non-representative quotations; - the participant is negligent in meeting its obligations set by the Memorandum; - upon receiving complaints from other participants of interbank deposit market on inappropriate behavior of the participant. KASE plans to start the project soon. Beginning form July 24 the participants of the project will begin to put out deposit quotations in the trade system of KASE in a test mode. The indicator is to be calculated regularly from August 1, 2000.