International reserves of National Bank of Kazakhstan in July flat mom, up 5.5% yoy
According to the National Bank gross international reserves in July rose slightly by $ 27mn to $ 30.5bn, 5.5% higher than a year ago
According to the National Bank gross international reserves in July rose slightly by $ 27mn to $ 30.5bn, 5.5% higher than a year ago. The growth is attributed to increase in assets in gold by $ 259mn due to the small increase in price and weight. Compared to the last year, the assets increased more than 43%. The foreign currency assets decreased by $ 233mn, or 7.2% yoy.
For the first time since February the NBK interventions on the foreign exchange market resulted in net sales in the amount of $ 198.7mn.
In July, Tenge weakened against USD by almost 4%. At the same time the volume of foreign currency trading on KASE amounted to $ 7.3bn and decreased by 12.7% from June. It was also below the average trading volume since the beginning of the year. Meanwhile, the Brent oil price fell by $ 7 a barrel, or by 15%.
In our view, the heightened threshold of currency risk aversion on the part of economic agents amid volatility in the oil market has seriously elevated devaluation expectations at the end of July. The decrease in foreign currency assets of the National Fund by $ 1bn (conversion operations performed by NBK) probably helped to smooth the jumps in the exchange rate of Tenge. Otherwise, either the scale of the interventions of the NBK, or the rate of exchange of Tenge could have been much higher. This idea is also supported by the annual peak in the exchange rate of Tenge to the Russian rouble at 5.38, attained in July.