Foreign Exchange Market  

(July 2008) 

On the foreign exchange market in July, there was kept a tendency of the national currency strengthening, under conditions of the surplus foreign currency demand as a result of the increase of deposits and money transfers influx. 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.  

In general, the weighted average USD exchange rate in the inter-bank foreign exchange auctions reduced by 2.2% within a month and constituted 35.0388 KGS/USD; the USD discount rate also reduced by 2.2% and constituted 35.1368 KGS/USD.  

The total volume of transactions on USD purchase and sales in the foreign exchange auctions in July constituted 120.9 million US dollars, increasing by 1.5 times in comparison with the previous month. Also the volume of the National Bank transactions on USD sale increased by 2.2 times and constituted 76.6 million US dollars. The volume of commercial banks transactions on USD purchase and sales in the foreign exchange auctions remained unchanged on the level of June and constituted 44.3 million US dollars.  

The USD exchange rate in exchange offices in July also remained reducing. In total, the weighted average USD selling rate in exchange offices reduced by 2.0% and constituted 35.0811 KGS/USD by the end of July. Herewith, on the average, in July the USD selling rate in exchange offices was 0.01 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 increased from 0.6 to 0.08%, and the average margin on USD buying/selling transactions increased from 0.31% to 0.41%. 

The EUR exchange rate dynamics in exchange offices was also formed mainly under the influence of its dynamics on the external markets, as well as due to fluctuations of KGS exchange rate against USD. After decrease at the beginning of July, first two decades of the month, the weighted average EUR selling rate in exchange offices fluctuated in the range between 55.5-56.3 KGS/EUR and in the last decade this rate was decreasing again. In general, the monthly weighted average EUR selling rate in exchange offices reduced by 2.6% and constituted 55.8456 KGS/UERO in the reporting month. The daily average fluctuation of EUR selling rate decreased from 0.19 to 0.14% and the average margin on buying/selling transactions increased from 0.48 to 0.57%. 

The RUB exchange rate in currency exchange offices after violent decrease at the beginning of month and following considerable fluctuations in the middle of July, in the second part of month was mainly decreasing. In general, the monthly weighted average RUB selling rate in exchange offices reduced by 2.3% constituting 1.4876 by the end of the reporting period. The daily average fluctuation of RUB selling rate increased from 0.09% to 0.15%, whereas the average margin increased inconsiderably from 0.61% to 0.79%.  

The KZT exchange rate in currency exchange offices was mainly reducing within a month, and totally the average weighted KZT selling rate in exchange offices reduced by 1.8% and constituted 0.2907 KGS/KZT by the end of July. The daily average fluctuation of KZT exchange rate increased from 0.08% to 0.12%, and the average margin reduced from 0.72% to 0.94%. 

The total volume of currency buying/selling transactions in currency exchange offices increased by 4.3% and constituted 2545.9 million soms. The increase of transactions volume was noted on transactions with all types of currencies. As a result, the share of transactions with EUR and RUB increased by 10.5% and 16.5% correspondingly, whereas the share of transactions with USD and KZT decreased by 60.3% and 11.7% correspondingly. The share of transactions with other currencies reduced from 1.2% to 1.0%.