Main Trends of the Financial Market  

(April 2007) 

In April, high liquidity level in the banking system, primarily, affected the decrease in the yield of long-term government treasury bills (12-month, 18-month and 24-month). Overall average weighted yield of bills reduced by 0.3 percentage points than in the prior period and was 6.6 percent. At the same time, the average weekly volume of filed bids reduced by 32.5 percent during the month and amounted to Som 76.3 million, and the volume of sales insignificantly increased and totaled Som 35.2 million. 

At the market of the NBKR notes, the overall average weighted yield increased by 0.6 percentage points during the month and was 3.9 percent. This was conditioned by the increase in the yield of 28-day NBKR notes from 3.3 percent up to 4.5 percent due to the increase of their issue. At the same time, the yield of 14-day notes was stable during the reporting period and remained at the same level of 3.3 percent. Demand, on average, increased by 18.9 percent during the week based on the results of held auctions and totaled Som 52.3 million. The sales volume reduced by 12.7 percent and amounted to Som 20.7 million. 

In April, the volume of borrowings in national currency at the interbank credit market reduced by 35.0 percent than in the previous month and amounted to Som 375.1 million. It reduced due to the decrease in the volume of REPO transactions by 43.2 percent, which totaled Som 302.1 million. The volume of interbank loans in national currency amounted to Som 73.0 million. However, the average weighted interest rate on REPO transactions increased by 0.4 percentage points up to 3.0 percent due to the increase in lending terms, and the cost of simple loans in national currency remained at the prior month’s level of 2.7 percent.  

In April, excess supply of foreign currency remained at the foreign exchange market because of the inflow of deposits, money transfers and earnings from export of goods and services. In order to smooth market conditions, the National Bank conducted transactions in the reporting month on purchasing US dollars, the volume of which increased by 2.5 times than in March and amounted to US$ 29.9 million. As a result, the situation at the foreign exchange market remained stable during the month and the average weighted rate of the dollar at the foreign exchange auctions remained at the level of Som 38.05 per US dollar at the end of the month. The official exchange rate of dollar also did not change and was Som 38.0500 per US dollar and the selling rate of dollar in exchange offices reduced by 0.3 percent down to Som 37.8228 per US dollar.  

At the same time, the decrease was noted in the exchange rate of the national currency vis-à-vis remaining major currencies. Thus, the selling rate of Euro in exchange offices vis-à-vis Som increased by 2.0 percent, the rate of Russian Ruble increased by 1.1 percent and the rate of Kazakh Tenge increased by 2.3 percent in April. 

With the objective to withdraw excess Som liquidity from the banking system, the National Bank announced auctions on selling Government Treasury Bills (for settlement) on REPO terms, based on the results of which, reverse REPO-agreements were concluded with commercial banks for the amount of Som 211.7 million in April. The yield of these operations changed in the range of 3.2 percent and 3.9 percent, depending on the term of transactions. Moreover, the National Bank performed operations on attracting commercial banks’ funds to term deposit accounts in the NBKR for the amount of Som 110.0 million at the rate of 2.0 percent for the term of 1 month.