Foreign Exchange Market
(January 2008)
On the first working days of January, the USD exchange rate was growing affected by an increased demand for the foreign currency on the part of commercial banks due to the growing spending on payment of clients’ import contracts. To smooth out drastic fluctuations of the exchange rates, the National Bank conducted auctions for USD sales. As a result, the situation in the foreign exchange market stabilized, and further on, the USD exchange rate grew at a slow rate.
In January, the monthly weighted average USD exchange rate in the inter-bank currency auctions increased by 2.5% and amounted to 36.1433 KGS/USD at the end of the month. The USD official exchange rate increased by 1.7% and reached 36.1037 KGS/USD.
The total volume of transactions at the currency auctions in the reporting month grew by 3.1% compared to December and amounted to USD 58.1 million. This growth occurred due to the increase in the National Bank transactions by 36.6% to USD 30.4 million. The NBKR only sold this currency in the context of increased demand from commercial banks. The volume of inter-bank transactions at the currency auctions decreased by 18.8% to USD 27.7 million.
The dynamics of the USD exchange rate in exchange offices was mostly similar to its dynamics at the currency auctions. The rate was mostly growing during the month; only at the month-end there was a slight rate decline. Over the month, the average weighted USD selling rate in exchange offices increased by 1.7% up to 36.1302 KGS/USD as of the end of the reporting period. The average monthly USD exchange rate in exchange offices was KGS 0.15 higher than the weighted average rate at the inter-bank currency auctions. A daily average fluctuation of USD selling rate in exchange offices decreased from 0.18% to 0.08%, and the average margin on USD buying/selling transactions decreased from 0.45% to 0.41%.
The EUR exchange rate dynamics in currency exchange offices, as usual, formed under the influence of its fluctuations in the external markets. In the first half of the month, the exchange rate was gradually going up, then it was going down, and in the last decade of the month it started growing again. The monthly weighted average EUR selling rate in exchange offices increased by 2.4% and amounted to 53.4692 KGS/EUR. A daily average fluctuation of EUR selling rate within the month decreased from 0.30% to 0.24%, and the average margin on buying/selling transactions increased from 0.63% to 0.65%.
The RUB exchange rate in currency exchange offices in the first half of January was increasing, then after some decline it was fluctuating within a narrow range. The weighted average selling rate of RUB in January increased by 2.9% to 1.4680 KGS/RUB at the end of the period. A daily average fluctuation of RUB selling rate decreased from 0.23% to 0.15%, and the average margin went down from 0.78% to 0.83%.
The KZT exchange rate in currency exchange offices was mainly increasing during January with significantly higher growth rate early in the month. Over the month, the weighted average KZT selling rate in exchange offices increased by 3.3% and amounted to 0.3005 KGS/KZT as of the end of January. The daily average fluctuation of KZT exchange rate decreased from 0.24% to 0.14%, and the monthly average margin went down from 1.04% to 0.94%.
The total volume of currency buying/selling transactions in currency exchange offices in the reporting period decreased by 25.7% and amounted to KGS 1,740.7 million. The decrease occurred in all currencies. As a result, the shares of transactions with USD went up to 66.1%, with EUR –up to 10.1% while the share of transactions with RUB and KZT reduced to 12.9% and 10.3%, accordingly. The share of transactions with other currencies did not change much and amounted to 0.60%.
