Foreign Exchange Market 

(April2008) 

In the beginning of April in the foreign market occurred a noticeable growth of UDS exchange rate. The rapid increase in the rate of merchandise import over export in April became one of the conditions for foreign currency high demand from commercial banks. The situation on the market remained stable till the second half of the month, and then the exchange rate of US currency reduced due to the increased offer on the market, and during the last week of April USD exchange rate fluctuated in the narrow range. The National Bank in order to smoothen the sharp fluctuations of KGS exchange rate performed purchase and selling transactions of US currency at the foreign exchange auctions. 

The monthly weighted average USD exchange rate in the inter-bank foreign exchange auctions has increased by 0.1 percent and amounted to 36.4539 KGS/USD as of the end of the month. The USD official exchange rate has increased by 0.1 percent and has reached 36.4426 KGS/USD. 

The total volume of USD purchase/sales transactions at the foreign exchange auctions in April has decreased by 5.8 percent in comparison with March and amounted to USD 46.7 million. The major portion of foreign currency transactions was performed by commercial banks (85.0% of the total volume of transaction on the inter-bank foreign exchange market) and their volume amounted to USD/KGS 39.7 million. The total volume of National Bank transactions comprised 7.0 millions USD, out of which purchase comprised 3.6 millions USD, and sales comprised 3.4 millions USD. In addition, during the reporting month the National Bank performed EUR sales at the foreign exchange auctions, and the volume of these transactions amounted to EUR 200,000.  

The index of the official exchange rate did not change in April and comprised 101.1. 

During the first week of the month USD rate increase was registered in the exchange offices, and then it continued to fluctuate in the narrow range. Overall, in April weighted average purchasing exchange rate in exchange offices rose by 0.6% and reached KGS/USD 36.4418, as of the end of the month. On average, over the month the USD selling rate in exchange offices was 0.03 soms lower, than the weighted average rate on the interbank foreign exchange actions. The daily average fluctuation of USD selling rate in exchange offices has increased from 0.04 per cent to 0.09 per cent, and the average margin on USD buying/selling transactions remained 0.30 per cent. 

The EUR exchange rate in the currency exchange offices was, as usual, formed under the influence of its dynamics at the external markets. Over the first two decades of the month EUR exchange rate went up, then its decrease was registered due to the reduction of EUR exchange rate at the world markets. The monthly weighted average EUR selling rate in exchange offices has decreased by 0.4 per cent and amounted to 57.0692 KGS/EUR as of the end of the month. The daily average fluctuation of EUR selling rate has decreased over the reporting month from 0.14 to 0.35 per cent, and the average margin on buying/selling transactions has decreased from 0.52 per cent to 0.47 per cent. 

The dynamics of RUR exchange rate in currency exchange offices was similar to the dynamics of EUR exchange rate: during the month it was mainly increasing, and only at the end of April occurred a decrease. Over the month, the weighted average selling rate of RUR has decreased by 0.6 per cent and comprised KGS/RUR 1.5352 as of the end of the month. The daily average fluctuation of RUR selling rate has decreased from 0.16 per cent to 0.11 per cent, and the average margin has decreased from 0.73 per cent to 0.70 per cent. RBER to the Russian ruble reduced by 1.6% and comprised to 69.67%. 

KZT exchange rate in currency exchange offices has been fluctuating over the month within the range of 0.299-0.304 KGS/KZT. On the whole, the weighted average KZT selling rate in exchange offices over the month has increased by 0.4 per cent and amounted to 0.3015 KGS/KZT, as of the end of the reporting month. The daily average fluctuation of KZT exchange rate has increased from 0.15 to 0.21 per cent, and the average margin has not changed and comprised 0.73 per cent. RBER to the KZT increased in comparison with March up to 98.11.  

The total volume of currency buying/selling transactions in currency exchange offices in the reporting month has increased by 13.5 per cent and amounted to KGS 2,420.3 million. The increase of transactions occurred in all currencies except for transactions with “other” currencies. Alongside with that, the shares of transactions with USD went down to 62.5 per cent, and the shares of transactions with EUR increased up to 11.6 per cent, RUR-up to 14.3 per cent, and KGS-11.3 per cent. The share of transaction with other currencies comprised 0.4 per cent.  

The dynamics of real exchange rates indicates that, on the whole, the competitive power of Kyrgyz goods in Kazakh markets has declined, and that the conditions for trading in the Russian market have improved. However, at large trade conditions in external markets remained at the level of the previous month.