Foreign Exchange Market  

(May 2008) 

In May, the situation in foreign exchange market was influenced and determined by redundant seasonal foreign currency supply in foreign currency market. As a result, the USD exchange rate over the month was gradually reducing. The National Bank in order to even the sharp fluctuations of KGS exchange rate performed purchase transactions of US currency at the foreign exchange auctions. 

The monthly weighted average USD exchange rate in May in the inter-bank foreign exchange auctions has decreased by 0.5 per cent and amounted to 36.2603 KGS/USD as of the end of the month. The USD official exchange rate has decreased by 0.4 per cent and constituted 36.2891 KGS/USD. 

The total volume of USD purchase/sales transactions at the foreign exchange auctions in May has increased by 26.0 per cent in comparison with April and amounted to USD 58.9 million. . The total volume of National Bank transactions on the USD purchase comprised 12.2 millions USD. The volume of commercial banks transactions on USD currency purchase/sales transactions at foreign exchange auctions constituted KGS 46.7 millions. Above all, during the reporting month NBKR performed USD cash transactions for commercial banks to the total amount of USD 4.0 millions. 

The official exchange rate against the foreign currencies of trade partners over the reporting month increased by 2.5 and constituted 102.6. 

In the exchange offices USD exchange rate was fluctuating in the narrow range and in general during the month the weighted average USD selling rate in exchange offices has changed inconsiderably and constituted as of the end of May KGS/USD 36.4455. On average, during the month the USD selling rate in exchange offices was 0.10 KGS higher than the weighted average rate on interbank foreign currency auctions. The daily average fluctuation of USD selling rate in exchange offices remained stable and comprised 0.04 per cent, and the average margin on USD buying/selling transactions reduced from 0.30 per cent to 0.29 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 and the fluctuations of KGS against USD. During the first days of May the reduction of EUR rate was registered, than EUR rate has been increasing in general till the end of the second decade, and than again a reduction was observed. In the large, during the reported month the EUR weighted average selling rate in exchange offices has reduced by 0.6 per cent and made KGS/EUR 56.7331 as of the end of the month. The daily average fluctuation of EUR selling rate in exchange offices has increased insignificantly from 0.14 per cent to 0.15 per cent, and the average margin on USD buying/selling transactions has increased from 0.47 per cent to 0.49 per cent.  

In May, RUR exchange rate was fluctuating in the exchange offices in the narrow range. Over the month, the weighted average selling rate of RUR has decreased by 0.1 per cent and constituted KGS/RUR 1.5331 as of the end of the accounting month. The daily average fluctuation of RUR selling rate has decreased from 0.11 per cent to 0.9 per cent, and the average margin has decreased from 0.70 per cent to 0.60 per cent. RBER to the Russian ruble in May constituted 71.57, increasing by 1.9.  

In May, KZT exchange rate was also fluctuating in the narrow range in the exchange offices. On the whole, the weighted average KZT selling rate in exchange offices over the month has increased by 0.1 per cent and amounted to 0.3018 KGS/KZT as of the end of the reporting month. The daily average fluctuation of KZT exchange rate has decreased from 0.17 to 0.15 per cent, and the average margin has increased from 0.73 per cent to 0.76 per cent. RBER to the KZT also increased by 2.7 and constituted 100.8  

The total volume of currency buying/selling transactions in currency exchange offices in the reporting month has decreased by 2.4 per cent and amounted to KGS 2,361.1 million. The share of USD transactions has reduced to 61.6 per cent; the share of EUR transactions-to 11.4, at the same time increased the share of transactions with Russian roubles up to 15.1, KZT- up to 11.4 per cent, the share of transactions with other currencies has increased from 0.4 to 0.5 percent.  

The dynamics of real exchange rates indicates that, on the whole, the competitive power of Kyrgyz goods in foreign markets has deteriorated, including Kazakh and Russian markets.