About situation at the financial market in February of 2004 - National Bank of Kazakhstan

/National Bank of Kazakhstan, March 3, 04/ - Following is the scheduled press- release of the National Bank of Kazakhstan in full volume dedicated to the situation at the republic's financial market in February of 2004 (note of IRBIS). INFLATION Slow down of inflation processes went on in February of 2004. According to official data of Kazakhstan statistics agency prices grew within the month by 0.5%. Prices for foodstuffs rose by 0.7%, for non-foods - by 0.1%, for paid services to population - by 0.3%. Since the beginning of this year inflation level equaled to 1.1% (in January- February of 2003 - 1.5%), prices for foodstuffs rose by 1.9%, for non-foods - by 0.1%, for paid services to population - by 0.5%. In February of 2004, as well as in January of 2004, inflation in annual expression equaled to 6.4%. INTERNATIONAL RESERVES AND MONEY AGGREGATES In February of 2004 National Bank's net international reserves rose in current prices by 2% to $5541.5 m. National Bank's currency purchasing at domestic currency market and currency inflows to the accounts of the Ministry of finance promoted to replenishment of net currency reserves (HC) by $121.6 m. Assets in gold decreased by $14.6 m. as the result of decrease of its price at the world market by 2.3%. Country's international reserves as the whole i.e. including the National Fund's money (according to preliminary data $3687.2 m.) rose in February by 1.4% to $9232.5 m. Growth of the National Bank's net international reserves in February of 2004 caused expansion of monetary base by 3.1% to KZT307.8 bn. In January of 2004 money supply remained almost unchanged at KZT969.8 bn. Growth of net external assets of the banking system by 8.6% was compensated by the decrease of its internal assets by 7.2% due to reduction of net requirements of the banking system both to the Government and to other sectors of economy as well. In January there was a season decrease of cash in circulation (М0) by 3.2% to KZT231.2 bn., and deposits in the banking system money supply structure rose by 1% to KZT738.7 bn. Decrease of cash in circulation in January because of growth of deposits caused growth of the stake of the latter ones in money supply structure from 75.4% to 76.2% and value of money multiplier from 3.06 to 3.25. CURRENCY MARKET In February of 2004 exchange rate of tenge varied within KZT138.86-139.48 for dollar. During the month tenge strengthened by 0.2% and by the end of February stock exchange's rate was KZT139.15 for dollar. Since the beginning of the year tenge strengthened in nominal expression against dollar by 2.9%. In Februaryе volume of stock exchange's transactions including deals at additional trades decreased in comparison with January by 25.3% to $491 m., and compared with similar period of 2003 - by 19%. Since the beginning of the year volume of stock exchange's transactions equaled to $1148.5 m. According to on-line data, volume of transactions at over-the-counter currency market decreased in comparison with January by 31.1% to $459.2 m., and in comparison with similar period of 2003 - grew by 2.1%. Since the beginning of the year volume of transactions at over-the-counter currency market equaled to $1125.7 m. GOVERNMENT SECURITIES MARKET In February of 2004 issue volume of government securities of the Ministry of finance rose by 25.6% to KZT9.6 bn. At the same time volume of these securities in circulation rose within the month by 2.9% to KZT173.9 bn. In February of 2004 there were held 4 auctions for floatation of mid-term securities: 2-, 4-, 5- and 10- year MEOKAM. Effective yield of 4-year bonds fell from 8.16% (on November 18, 02) to 6.09%, whereas yield of other instruments did not change and regarding 2- year instruments equaled to 5.88%, 5-year - 6.18%, 10-year - 6.50%. Repayment of government securities of the Ministry of finance, including interest payment, in February of 2004 equaled to KZT6.2 bn. Issue volume of the National Bank's notes in February of 2004 fell by 23.7% to KZT44.4 bn., whereas average monthly yield on them insignificantly decreased from 5.05% to 5.04%. Volume of notes repayment in February of 2004 equaled to KZT18.3 bn. As the result volume of notes in circulation rose within the month by 11.1% to KZT249.6 bn. In February of 2004 volume of deals on the National Bank's direct repo transactions insignificantly decreased (by 2.7% to KZT59.4 bn.). Reverse repo transactions, and also purchase and sale of government securities at the secondary market in February of 2004 were not held. INTERBANK MONEY MARKET In January of 2004 banks' activity in floatation of liquid instruments at the interbank money market fell. In comparison with December of 2003 volume of floated interbank tenge deposits decreased by 38.3% to KZT26.8 bn. It occurred because of growth of weighted average interest rate on floated tenge deposits from 2.78% to 3.85%. Main volume of transactions at currency borrowing market was made due to dollar deposits. Volume of placed dollar deposits decreased within the month by 11.6% to $1.3 bn. Profitability level on dollar deposits grew in January: weighted average interest rate rose from 1.73 to 2.05%. Volume of transactions in other currencies was not big. DEPOSIT MARKET Total volume of residents' deposits rose in January by 1.0% to KZT738.7 bn. ($5.3 bn.). Main positive moment in January was the forward growth of deposits in the national currency in comparison with deposits in foreign currency. Thus, deposits in the national currency rose by 3.2% to KZT399.3 bn., whereas deposits in foreign currency fell by 1.5% to KZT339.4 bn. ($2.4 bn.). Deposits of juridical entities rose by 2.1% to KZT404.1 bn., whereas deposits of physical persons fell by 0.2% to KZT334.6 bn. Population's deposits (including non-residents) fell within the month by 0.2% to KZT342.6 bn. This decrease has not been caused by deposits outflow, but by revaluation of deposits in foreign currency under conditions of abrupt decrease of US dollar's rate. Thus, in January population's deposits (including non-residents) in dollar equivalent increased by 2.6% to $2.46 bn. Tenge deposits in the structure of population's deposits rose by 10.9%, whereas volume of deposits in foreign currency fell by 6.8% to KZT200.0 bn. As the result proportion of tenge deposits rose from 37.5% to 41.6%. In January weighted average interest rate on tenge term deposits of non-banking juridical entities equaled to 3.1% (in December of 2003 - 3.5%), and on physical persons' deposits - 10.0% (10.9%). CREDIT MARKET Total volume of the main debt on banks' credit to economy decreased in January by 0.4% to KZT974.6 bn. This decrease was caused by strengthening of tenge's rate and revaluation of credits in foreign currency. In dollar equivalent total volume of banks' credits increased in January by 2.4% to $7.0 bn. Credits in the national currency rose by 3.7% to KZT451.5 bn., and in foreign currency decreased by 3.6% to KZT523.1 bn. ($3.8 bn.). As the result proportion of tenge credits rose within the month from 44.5% to 46.3%. Long-term credits rose by 0.5% to KZT611.4 bn., whereas short-term credits decreased by 1.8% to KZT363.2 bn. Proportion of long-term credits increased within the month from 62.2% to 62.7%. Banks' credits to small business subjects decreased within the month by 2.0% to KZT192.3 bn. In January weighted average interest rate on credits in the national currency to non-banking juridical entities equaled to 15.0% (in December of 2003 - 14.9%), on credits to physical persons - 19.4% (20.3%). [2004-03-10]