Foreign Exchange Market  

(June 2008) 

On the foreign exchange market in June, there was kept a tendency of the national currency strengthening, due to seasonal surplus currency conditions as a result of the increase of foreign currency influx to the internal market, including money transfers. To smooth exchange rate fluctuations of the som exchange rate during the reporting month, the National Bank conducted transactions on USD purchase at the foreign exchange auctions.  

The weighted average USD exchange rate in the inter-bank foreign exchange auctions reduced by 1.2% and constituted 35.8242 KGS/USD by the end of the month; the USD accounting rate reduced by 1.1% and constituted 35.9283 KGS/USD.  

The total volume of transactions on USD purchase and sales in the foreign exchange auctions constituted 79.1 millions USD, increased by 34.3% in comparison with May of the present year. The volume of the National Bank transactions on USD sale increased by more than 2.9 times and constituted 34.8 millions USD. The volume of commercial banks transactions on USD purchase and sales in the foreign exchange auctions reduced by 5.2% and constituted 44.3 million USD. Moreover in the reporting period, the National Bank of the Kyrgyz Republic conducted transactions on USD monetization for commercial banks for the total amount of 7.0 million USD.  

The USD exchange rate in exchange offices also reduced and totally the weighted average USD selling rate in exchange offices reduced by 1.8% and constituted 35.7814 KGS/USD by the end of June. On the average, the USD selling rate in exchange offices was 0.08 soms higher than the weighted average rate at the inter-bank foreign exchange auctions. 

The daily average fluctuation of USD selling rate in exchange offices has increased from 0.04 to 0.6%, and the average margin on USD buying/selling transactions increased from 0.29 to 0.31%. 

The EUR exchange rate dynamics in the currency exchange offices was formed mainly under the influence of its variations at the external markets, as well as due to the changes of KGS exchange rate against USD. In the first half of June, the EUR exchange rate had reduced, whereas in the second half of June there was a certain strengthening of EUR.  

In general, the monthly weighted average EUR selling rate in exchange offices reduced by 0.8% and constituted 56.299 KGS/UERO by the end of the month. The daily average fluctuation of EUR selling rate increased from 0.15 to 0.19% within the month and the average margin on buying/selling transactions reduced from 0.49 to 0.48%.  

The RUB exchange rate in currency exchange offices in the first half of June was mainly reducing and in the second half of June it was fluctuating within a small spectrum. Over the month, the weighted average selling rate of RUB reduced by 0.7% and constituted 1.522 KGS/RUS by the end of the reporting period. The daily average fluctuation of RUB selling rate remained on the level of 0.09%, whereas the average margin increased inconsiderably from 0.60% to 0.61%.  

The KZT exchange rate in currency exchange offices was mainly reducing within the month, and totally the average weighted KZT selling rate in exchange offices reduced by 2.0% and constituted 0.2959 KGS/KZT by the end of the month. The daily average fluctuation of KZT exchange rate reduced from 0.11 to 0.08%, and the average margin reduced from 0.76% to 0.72%. 

The total volume of currency buying/selling transactions in currency exchange offices in June increased by 3.5% and constituted 2441.6 million soms. The increase of transactions was noted in all types of currencies except for transactions with EURO. Herewith, the share of transactions with USD reduced to 61.4% and with EURO to 10.2%. At the same time the share of transitions with RUS increased to 15.2% and with KZT to 12.0%. The share of transactions with other currencies increased from 0.5 to 1.2%.