NBK will keep the inflation at 6-7% in 2001

08.11.00 00:00
/IRBIS, Nov.8, 00/ - REUTERS informs, with the reference to the vice chairman of the National Bank, Bisengali Tadjyakov, that the bank will keep the inflation at 6-7% in 2001 and make interventions on domestic currency market only to prevent sharp fluctuations of the exchange rate. At the Majilis (lower house of the parliament) he confirmed that average annual exchange rate of the tenge to the dollar can be at KZT152.7, while it is KZT143.3 per U.S. dollar based on corrected budget, and inflation is to be under 9%. He said that KZT152.7 was the most adequate devaluation indicator level and it was about 5-6% inflation. The National Bank also considers several scenarios for the exchange rate movement depending on external factors. Under a favorable condition devaluation is expected to slow down and exchange rate may be at KZT149- 150 per dollar, if the situation worsens the devaluation may reach 7-8% and average annual rate at KZT151-135 per dollar. If demand for major articles of the Kazakhstani exports remains then positive surplus of the current accounts may equal 3% of GDP, is said. It is said that the National Bank expects that growth of gold and hard currency reserves will continue and their volumes will be sufficient to cover three-month imports of goods and services. He said that along with inflow of external financing, namely, direct investments, positive surplus of the payment balance would stimulate the growth in international reserves and strengthening of the country's international positions. The National Bank is said to support 20-25% expansion of the monetary mass (KZT480-490 bln) in order to support the GDP growth expected in the budget-2000. Mr. Tadjyakov said that expansion of monetary mass would equal 10% to the level of this year, at KZT155-160 bln. It is also believed that decrease in inflation will be followed by the reduction of refinancing rate to 8-10%, which should lower loan rates of the banks to 12-14% from current 19-21%. The National Bank expects the growth of the bank deposits at 20-25%, which is KZT350 bln. Also, deposits of the population (including those of non- residents) are expected to grow up to KZT150 bln ($950 mln). Deposits of the population equaled KZT78.8 bln ($551.7 mln) as of October 1, 2000, is said. He said that the financing potential of the bank may increase due to the development of the market of bills, whose legislative base will be formed till the end of this year. The National Bank is said to expect that in next year the banks will be more active in refinancing the bills of the companies at the rate which is expected at 7-8% by the end of 2001. It is said that only one company, Kazatomprom, has issued common commercial bills for an amount of KZT300 mln to settle accounts with its suppliers. The financing of the Kazakhstani banks is expected to grow by 20-25% by the end of next year, up to KZT300 bln, with simultaneous growth in the aggregate assets of the banks up to KZT640 bln or $4 bln. No comparable data were given though.