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

/National Bank of Kazakhstan, July 9, 04/ - Following is the full scheduled press- release of the National Bank of Kazakhstan dedicated to the situation at the republic's financial market in June of 2004 (note of IRBIS). INFLATION According to Kazakhstan statistics agency's official data inflation in June of 2004 equaled to 0.3% (in June of 2003 - 0.1%). Consumer prices grew because of growth of prices for nonfoods - by 1.0% and paid services - by 0.3%, prices for foodstuffs remained on the level of May of 2004 - 0.0%. In the structure of foodstuffs growth of prices for meat and meat foods (by 1.5%), for fish and sea products (by 0.6%) was compensated by falling of prices for eggs (by 3.2%), for milk and dairy produce (by 2.8%), for fruits and vegetables (by 1.1%). Positive moment of June of 2004 is slow down of growth of prices for grain products and cereals, which was 0.1%. Prices for other foodstuffs almost remained unchanged. Prices for nonfoods grew mainly because of growth of prices for gasoline - by 8.5% (by 33.0% in annual expression) and diesel fuel and mazut - by 11.9%. Besides there was growth of prices for carpets - by 0.7%, for crockery - by 0.6%, for footwear and personal hygiene goods - by 0.5% each. Among paid services there was growth of prices for medical services - by 1.5%, services of cultural institutions - by 0.6%, transport and educational services - by 0.5% each. Prices for public utilities grew because of growth of prices for lodging keeping services - by 1.0%, and gas supply - by 0.6%. Since the beginning of this year inflation rate equaled to 2.4% (in January-June of 2003 - 2.3%), at that, prices for foodstuffs grew by 3.0%, for nonfoods - by 1.7%, for paid services for population - by 1.7%. In June of 2004 inflation in annual expression equaled to 6.9% (in May of 2004 - 6.6%). PAYMENT BALANCE According to results of the 1st quarter of 2004 surplus of the current account of the payment balance has equaled to USD349 m. While negative balance on incomes and international services grew by more than one third positive balance on current account operations was formed by growth of active trade balance up to USD1.5 bn. High price level resulted in achievement of the record quarterly goods export - USD4.1 bn. that was more by 29% than in similar period of 2003, among them about USD2.2 bn. fall to the stake of export of oil and gas condensate. Goods import was also growing with high growth rates - within the quarter it equaled to about USD2.6 bn. having exceeded 1.4 times the indicator of the 1st quarter of 2003. Net-inflow of direct foreign investments (DFI) for the quarter is USD951 m. As well as before the dominating part of DFI inflow falls to the stake of oil and natural gas production, and also to the stake of geological and survey activities. Net- inflow of long-term loans borrowed by the country's banking sector equaled to USD350 m. Growth of export incomes and inflow of foreign financial resources caused the considerable growth of foreign assets of the private sector and country's official reserves. In the 1st quarter of 2004 gross foreign debt grew by more than USD890 m. and by March 31 of 2004 it exceeded USD23.7 bn. INTERNATIONAL RESERVES AND MONEY AGGREGATES In June of 2004 National Bank's net international reserves rose in current prices by 1.3% to $6631.3 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 $81.6 m. Assets in gold increased by $1.6 m. as the result of transactions conducted by the National Bank and decrease of its price at the world market by 0.03%. Country's international reserves as the whole i.e. including the National Fund's money (according to preliminary data $3701.2 m.) rose in June by 0.9% to $10336.6 m. Growth of the National Bank's net international reserves in June of 2004 caused expansion of monetary base by 7.8% to KZT388.5 bn. In May of 2004 money supply grew by 5.2% to KZT1147.5 bn. Major factors of money supply growing were growth of both net foreign assets of the banking system (by 2%) and its internal assets (by 8.3%). Cash in circulation (М0) grew in May by 1.4% to KZT260.5 bn., and deposits in the banking system in money supply structure - by 6.4% to KZT887 bn. Advance of deposit growth rates in comparison with cash in circulation in May caused falling of the stake of latter ones in money supply structure from 23.6% to 22.7%. Advance of monetary base growth rates in comparison with money supply caused falling of money multiplier from 3.45 to 3.18. CURRENCY MARKET High level of the world prices for major goods of Kazakhstan export promoted to the considerable inflow of exporters' currency proceeds to domestic currency market that influenced upon growth of the rate of the National currency against US dollar. During the month rate of tenge against dollar varied within KZT136.00 - KZT136.77 per 1 dollar. During the month tenge strengthened by 0.83% (in January - 2.73%, in February - 0.19%, in March - 0.16%, in April - 0.53%, in May - 0.72%). By the end of the period stock exchange's rate of tenge equaled to KZT136.06 per dollar. Since the beginning of the year tenge has strengthened against dollar in nominal expression by 5.07% (by the end of May - 4.28%). Weighted average exchange rate of tenge against dollar for 6 months of 2004 is KZT138.42 per 1 dollar. Within 5 months of this year tenge strengthened against Russian rouble in real expression by 0.9%, against US dollar - by 5.9% and euro - by 8.7%. In June of 2004 volume of stock exchange's transactions taking into account deals at additional trades grew in comparison with May by 6.8% to USD536.6 m. (since the beginning of the year volume stock exchange's transactions is USD3.3 bn.). At over-the-counter currency market volume of transactions fell in comparison with May by 9.0% to USD641.6 m. (since the beginning of the year - USD3.8 bn.). GOVERNMENT SECURITIES MARKET In June of 2004 issue volume of government securities of the Ministry of finance rose in comparison with May of 2004 by 36.5% to KZT10.6 bn. In June of 2004 auctions only on 6-month MEKKAM were held, auctions on mid- term securities were not held. Yield of 6-month MEKKAM remained unchanged at 4.95%. Redemption of government securities of the Ministry of finance, excluding interest payment, in June of 2004 was KZT1.6 bn. As the result volume of securities of the Ministry of finance in circulation increased in comparison with the previous month by 4.8% to KZT199 bn. by the end of June of 2004. Issue volume of the National Bank's notes in June of 2004 grew in comparison with May of 2004 by 16.9% to KZT32.6 bn., whereas their yield decreased from 5.00% to 4.98%. Volume of notes repayment in June of 2004 equaled to about KZT26.7 bn. Volume of notes in circulation by the end of June was KZT311.8 bn. having increased in comparison with previous month by 2.1%. In June of 2004 in comparison with previous month volume of deals on the National Bank's direct repo transactions increased by 41.6% to KZT79.0 bn. Reverse repo transactions were not held in June of 2004. DEPOSIT MARKET Total volume of residents' deposits rose in May by 6.4% (since the beginning of the year - by 21.1%) to KZT887.0 bn. (almost $6.5 bn.). Deposits in the national currency rose by 8.2% to KZT483.0 bn., whereas deposits in foreign currency - by 4.4% to KZT404.0 bn. ($2.9 bn.). As the result proportion of tenge deposits grew in May from 53.6% to 54.5%. Deposits of juridical entities rose by 10.1% to KZT516.7 bn., whereas deposits of physical persons - by 1.7% to KZT370.4 bn. Population's deposits (including non-residents) rose within the month by 1.6% (since the beginning of the year - by 9.9%) to KZT377.4 bn. In the structure of population's deposits tenge deposits grew by 3.9% to KZT165.4 bn., and volume of deposits in foreign currency almost did not change (KZT212.0 bn.). As the result, proportion of tenge deposits increased in comparison with April from 42.9% to 43.8%. In May weighted average interest rate on tenge term deposits of non-banking juridical entities equaled to 2.9% (in April of 2004 - 3.0%), and on physical persons' deposits - 9.6% (9.2%). CREDIT MARKET Total volume of the main debt on banks' credits to economy increased in May by 5.7% (since the beginning of the year - by 18.2%) to KZT1156.6 bn. (USD8.4 bn.). Credits in the national currency rose within the month by 6.4% to KZT540.5 bn., and credits in foreign currency - by 5.0% to KZT616.1 bn. ($4.5 bn.). As the result proportion of tenge credits rose in comparison with April from 46.4% to 46.7%. Long-term credits rose by 5.9% to KZT749.9 bn., and short-term credits - by 5.2% to KZT406.7 bn. Proportion of long-term credits increased in comparison with April from 64.7% to 64.8%. Banks' credits to small business subjects increased within the month by 4.3% to KZT243.8 bn. In May weighted average interest rate on credits in the national currency to non- banking juridical entities fell from 15.0% to 14.3%, on credits to physical persons - from 21.5% to 21.1%. [2004-07-09]