Dollar in Kazakhstan falls because of big volumes of currency proceeds

/REUTERS, Almaty, Tatyana Seroshtanova, May 23, 03/ - Significant inflows of currency proceeds to Kazakhstan market caused a new abrupt decrease of dollar's rate in the end of the week after its correcting growth in the beginning of the current week, dealers say. "After the rate (of dollar) jerked upwards, that was partially caused by speculative mood, many banks started closing their short positions. Due to this the rate rose rather highly - to 151.40 and even higher. Then, what should be expected, the rate began to fall on account of clients' sales of big volumes of exporters' proceeds. These big volumes are coming to the market now", - said one of Kazkomemrtsbank's dealers. On Friday weighted average rate of Kazakhstan tenge in comparison with US dollar at Kazakhstan stock exchange's morning session rose up to 150.50 for $1 from 150.82 on Thursday. Volume of trades was unusually high - $40.175 m. in comparison with $26.875 m. on Thursday. "We called the last two-three days at the market of tenge/dollar "chronicle of diving bomber". Within these three days dollar went from Tuesday's levels 151.40- 151.50 to today's minimums -150.35-150.40 tenge for $1 - more than a figure. We forecasted coming back to these levels, but we did not expect it would be so soon", - said Igor Romanenko from Temirbank. Strengthening of dollar's rate, which continued from Monday till Wednesday, is called by dealers as technical correction, which has been caused by closing of short positions by banks after mass sales the last week, and also by the formed short-term real demand. Despite of preservation of ascending trend in first half of the week, many market's participants expected return of the rate on previous positions for big volumes of export sales and banks' growing borrowings at foreign markets give dollar almost no chances for restoration of former positions. "There is no real interest to buy dollars. Sale of dollars, which were taken at foreign markets, becomes a dominating factor. Some banks declared about such the plans and, as new borrowings will appear at the market, these dollars will be sold", - Romanenko from Temirbank said. Halyk bank, which is one of three largest banks of the republic, has declared about intention to borrow a syndicated loan for $100 m. in the nearest future. Another bank of the first three - TuranAlem - this week floated seven-year eurobonds for $225 m. with the coupon 7.875% APR at 98.685% of the face value. In April the country's largest Kazkommertsbank floated eurobonds for $500 m. According to forecasts of some participants of the market, the next week will not bring significant changes, and dollar's quotations will vary within 150.00-150.20 tenge for $1. Pressure upon dollar can be kept in the near future, and, according to dealers, growth rates of tenge and support levels in many respects will depend on the National bank, which remains the major operator of the currency market. "I do not think, that speculation plays major role in the market now. Certainly, some speculative growth of dollar is not excluded, but it hardly will be long and significant ", - the dealer of Kazkommertsbank considers. [2003-05-23]