Tenge deficit caused high volatility of dollar in Kazakhstan

/REUTERS, Almaty, Tatyana Seroshtanova, October 17, 03/ - Tenge deficit in this week caused decrease of dollar's rate at Kazakhstan currency market by more than "half point", however on Friday at stock exchange's trades dollar came back to last week's level - KZT147.29 - and dealers are waiting for renewal of the growth after ending of budget payments. "The market is very volatile. Major factor is lack of tenge. Rates overnight yesterday and the day before yesterday were 20-30% APR", - said one of Kazkommertsbank's dealers. Market's participants consider monthly tax payments as the main reason of the appeared deficit of the national currency. "Tax payments have started, it was especially notable yesterday, when there were great problems concerning tenge liquidity, when banks attracted tenge at 20-25%, and volumes of borrowings were great ", - said dealer of Halyk bank. According to dealers' words, total volume of borrowing equaled to about four billion tenge. The abruptly increased demand for the national currency caused abrupt decrease of dollar to KZT146.86 during the trades of Kazakhstan stock exchange on Thursday. Weighted average rate, according to results of the session, equaled to KZT146.91 for $1. Many participants expected further decrease of USD's rate on Friday, however appearance of a large player at the market changed the situation. "This morning we saw KZT146.90 for $1. But there appeared one large bank and started speculation. In the morning it tried to jerk the market up. And it succeeded. Within about 20-30 minutes it raised the rate to 147.08 for $1", - said Halyk bank's dealer. In dealers' opinion, it will be possible to determine further direction of the market only after ending of tax payments on October 20. "We'll see what will occur on Monday - final payment will be on October 20. Probably many banks will have problems with tenge liquidity, and bank will have to sell currency. I think the range is KZT147.00-147.50 for $1, not more. As we saw yesterday and the day before yesterday tenge will not strengthen anymore " - said Halyk bank's dealer. However some participants of the market do not exclude further growth of dollar. "Judging on how quickly the rate grew, the market tends to grow ", - said one of dealer of bank TuranAlem. And Kazkommertsbank's dealer, who is waiting for some growth of dollar, agrees with him. "We are waiting for some growth - it will occur, but it will grow with great difficulties and then... it may fall too. I think, the rate will be near 146.80-147.80 for $1", - he said. [2003-10-17]