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

/IRBIS, August 10, 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 July of 2004 (translated by IRBIS). INFLATION According to Kazakhstan statistics agency's official data inflation in July of 2004 equaled to 0.2% (in June of 2004 - 0.3%; July of 2003 - 0.0%). Consumer prices grew because of growth of prices for nonfoods - by 0.8% and paid services - by 0.1%, prices for foodstuffs remained on the zero level. In the structure of foodstuffs following products registered growth: sugar - 4.1%; macaroni - 1.2%; meat and meat foods - 0.4%, cereals - 0.3%; bread - 0.1%. Price fell for: eggs - 1.5%, for milk and dairy produce - 2.1%, for fruits and vegetables - 2.9%. Prices for nonfoods grew mainly because of growth of prices for gasoline - by 6.6% and diesel fuel - by 2.7%; printing - 0.7%; footwear - 0.5%; tissues, clothes and personal hygiene goods - by 0.3% each. Among paid services there was growth of prices for education and medical services -0.3%, postal and legal services - 0.4% each; cultur and recreation - 0.5%. Since the beginning of this year inflation rate equaled to 2.6% (in January-July of 2003 - 2.2%), at that, prices for foodstuffs grew by 3.1%, for nonfoods - by 2.5%, for paid services for population - by 1.8%. In July of 2004 inflation in annual expression equaled to 7.1% (in June of 2004 - 6.9%). INTERNATIONAL RESERVES AND MONEY AGGREGATES In July of 2004 National Bank's net international reserves rose in current prices by 0.3% (or $22.7 m) to $6654.0 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 foreign exchange reserves (FER) by $26.5 m. Assets in gold decreased by $3.8 m. as the result of transactions conducted by the National Bank and decrease of its price at the world market by 1.1%. Country's international reserves as the whole i.e. including the National Fund's money (according to preliminary data $3729.4 m.) rose in July by 0.5% to $10387.5 m. Growth of the National Bank's net domestic reserves in July of 2004 caused decrease of monetary base by 2.1% (or by KZT 8.2 bn) to KZT 380.3 bn. In June of 2004 money supply grew by 4.6% to KZT 1200.3 bn. Major factor of money supply growing was growth of domestic assets of banking system by 11.4%. It should be noted that in June deposits of loan partnerships were included in the indicator. Cash in circulation (М0) grew in June by 8.1% to KZT 281.5 bn., and deposits in the banking system in money supply structure - by 3.5% to KZT 918.8 bn. Advance growth of cash in comparison with deposit growth rates in June caused falling of the stake of latter ones in money supply structure from 77.3% to 76.6%. Advance of monetary base growth rates in comparison with money supply caused falling of money multiplier from 3.19 to 3.09. 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 growth of the rate of the national currency against US dollar during first three weeks. During July 23 - July 30 domestic market recorded strengthening of dollar caused mainly by its growth on the world market. During the month rate of tenge against dollar varied within KZT135.20 - KZT136.37 per 1 dollar. During the month tenge devaluated by 0.17%. By the end of the period stock exchange's rate of tenge equaled to KZT136.29 per dollar. Since the beginning of the year tenge has strengthened against dollar in nominal expression by 4.91% (by the end of June - 5.07%). Weighted average exchange rate of tenge against dollar for 7 months of 2004 is KZT 138.02 per 1 dollar. In July of 2004 volume of stock exchange's transactions taking into account deals at additional trades fell in comparison with June by 7.6% to USD 495.8 m. (since the beginning of the year volume stock exchange's transactions is USD 3.8 bn.). At over-the-counter currency market volume of transactions fell in comparison with June by 14.0% to USD 551.8 m. (since the beginning of the year - USD4.3 bn.). GOVERNMENT SECURITIES MARKET In July of 2004 only one floatation auction over bonds of the Ministry of finance was conducted (MEKKAM-12). Floatation volume KZT 14.3 bn or 34.2% higher in comparison with June of 2004. Yield equaled - 4.79% (WA yield in June - 4.95%). Redemption of government securities of the Ministry of finance, including interest payment, in July of 2004 was KZT 6.1 bn. including 5.2 bn - principal repayment. As a result volume of securities of the Ministry of finance in circulation increased in comparison with the previous month by 4.6% to KZT 208.1 bn. by the end of July of 2004. Emission volume of the National Bank's notes in July of 2004 grew in comparison with June of 2004 by 52.4% to KZT 49.6 bn., whereas their yield decreased from 4.98% to 4.35%. Volume of notes repayment in July of 2004 equaled to KZT 37.5 bn. Volume of notes in circulation by the end of July was KZT 325.4 bn. having increased in comparison with previous month by 4.4%. In July of 2004 in comparison with previous month volume of deals on the National Bank's direct repo transactions decreased by 9.3% to KZT 71.7 bn. Reverse repo transactions were not held in July of 2004. INTERBANK MONEY MARKET In June 2004 banks have been actively investing liquid tenge funds on the interbank money market as a result of growth of legal entities and individuals deposits. In June volume of interbank deposits increased 2.4 times tp KZT 74.0 bn compared to May. WA rate of deposits fell from 3.38% to 2.63%. On the interbank market of foreign exchange deposits dollar remained as a main operating currency. Volume of dollar deposits in June equaled $1.6 bn falling by 29.1% compared to May. WA rate increased from 1.28 to 1.45%. It should be noted that in June Rouble operations significantly increased. This was caused by demand on liquid funds from Russian banks. For instance, In June WA rate over Rouble denominated deposits fell from 8.4% to 5.49% (most probably because of stabilization of Russian interbank market). DEPOSIT MARKET Total volume of residents' deposits rose in June by 3.5% (since the beginning of the year - by 25.3%) to KZT 918.8 bn. (more than $6.7 bn.). Deposits in the national currency rose by 2.5% to KZT495.0 bn., whereas deposits in foreign currency - by 4.8% to KZT423.0 bn. ($3.1 bn.). As the result proportion of tenge deposits fell in June from 54.5% to 53.9%. Deposits of juridical entities rose by 3.7% to KZT 536.2 bn., whereas deposits of individuals - by 3.3% to KZT 382.6 bn. Population's deposits (including non-residents) rose within the month by 3.2% (since the beginning of the year - by 13.5%) to KZT 389.5 bn. In the structure of population's deposits tenge deposits grew by 5.9% to KZT 175.3 bn., and volume of deposits in foreign currency grew by 1.1% to KZT 214.3 bn. As a result, proportion of tenge deposits increased in comparison with May from 43.8% to 45.0%. In June weighted average interest rate on tenge term deposits of non-banking juridical entities equaled to 3.3% (in May of 2004 - 2.9%), and on individuals deposits - 9.6% (9.6%). CREDIT MARKET Total volume of the principal debt on banks' credits to the economy increased in June by 2.3% (since the beginning of the year - by 21.0%) to KZT 1183.5 bn. (USD 8.7 bn.). Credits in the national currency rose within the month by 1.1% to KZT 546.2 bn., and credits in foreign currency - by 3.5% to KZT 637.3 bn. ($4.7 bn.). As a result proportion of tenge credits fell in comparison with May from 46.7% to 46.2%. Long-term credits rose by 3.4% to KZT 775.6 bn., and short-term credits - by 0.3% to KZT407.9 bn. Proportion of long-term credits increased in comparison with May from 64.8% to 65.5%. Banks' credits to small business subjects increased within the month by 2.1% to KZT 248.9 bn. Sectoral division is following: trade - 28.2%; industry - 24.6^; construction - 10.0% and agriculture - 8.4%. No significant changes occurred in regional distribution of deposits. Main volumes fall on Almaty city - 67.4%; Astana city - 5.8%; Karaganda region - 4.9%; East Kazakhstan region - 4.1%. In June weighted average interest rate on credits in the national currency to non- banking juridical entities did not change and equaled to 14.3%, on credits to individuals - 21.2%. [2004-08-10]