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Financial Market Main Trends for February 2007 

 

 

In February despite some reduction the liquidity remained at a reasonably high level in the banking system. As a result the demand continued to grow at the primary market of the government treasury bills (GTBs), and their yield reduced. Thus, the volume of filed bids at the GTBs auctions increased by 24.0 per cent on the average per week and amounted to Som 127.1 million. The average weekly volume of sales was Som 35.1 million having increased by 15.2 per cent in comparison with January due to the increase in the volume of the issue of short-term bills. Meanwhile the average weighted yield of GTBs reduced by 0.7 percentage points and accounted for 7.2 per cent in comparison with the prior period.  

However, the demand reduced on the part of commercial banks at the primary market of the NBKR notes. Six auctions out of the eight announced auctions were not held due to the insufficient number of participants. At the same time, the average volume of the demand at the two auctions that were held on the placement of the 14-day NBKR notes reduced by 35.2 per cent and amounted to Som 39.7 million, and the volume of the notes sales amounted to Som 16.0 million on the average per week, having reduced by 33.3 per cent. The average monthly yield of the 14-day notes reduced by 0.2 percentage points to 3.3 per cent.  

At the interbank credit market the volume of borrowings in domestic currency increased by 2.3 times mainly due to the growth in demand on the part of one of commercial banks and amounted to Som 945.6 million. Meanwhile practically all transactions were concluded on REPO terms the volume of which amounted to Som 927.6 million, and the volume of interbank loans in domestic currency was Som 18.0 million. At the same time the average monthly rate on REPO operations reduced by 0.4 percentage points to 3.0 per cent, and the cost of interbank loans in domestic currency remained at the level of 3.3 per cent.  

In February at the foreign exchange market after some rise at the beginning of the month the drop was noted at a later stage in the US dollar rate under the influence of the deposits inflow and of the increase in receipts from exports of goods and services. With the objective to smooth the market conditions at the beginning of February the National Bank performed operations on selling US dollars at the foreign exchange auctions, and purchased US dollars at the end of the month. For the month the volume of US dollars sold by the National Bank amounted to US$1.4 million, and the volume of US dollars purchased was US$ 4.3 million. The average weighted dollar rate at the foreign exchange auctions reduced by 1.1 per cent and was Som 38.306/US dollar as of end of February. For the reporting month the dollar discount rate reduced by 0.6 per cent to Som 38.3907/ US dollar, and the selling rate for the dollar in the exchange offices reduced by 0.8 per cent and was Som 38.3088/ US dollar.  

The domestic currency rate in exchange offices in relation to the remaining major currencies decreased: by 0.9 per cent in relation to Euro, by 1.2 per cent to the Russian Ruble, and by 0.9 per cent to Kazakh Tenge.  

With the objective to withdraw the excessive Som liquidity from the banking system, in February the National Bank conducted auctions on selling GTBs (settlement) under REPO terms, based on the results of which the reverse REPO-agreements were concluded with commercial banks for the amount of Som 140.1 million. The yield of these operations changed in the range of 3.55 to 3.84 per cent, depending on the term of the transactions. Moreover, the National Bank performed two operations on attracting commercial banks funds to the term deposit accounts in the NBKR for the amount of Som 80.0 million at the rate of 2.0 per cent for the term of 1 month.