Foreign Exchange Market
(October 2008)
On the foreign exchange market in October, there was a continuous growth of the USD exchange rate. It was caused by persisting high demand for USD on the part of the market participants in conditions of increasing negative trade balance as well as under the influence of USD strengthening against other world currencies in external markets within a month. In the reporting month, the National Bank of the Kyrgyz Republic participated on the interbank foreign exchange market as a purchaser and seller of US dollars.
In general the weighted average USD rate in the inter-bank foreign exchange markets increased by 6.0 percent and constituted 38.8500 KGS/USD at the end of October, whereas the discount USD rate increased by 4.2 percent and constituted 38.2101 KGS/USD.
The overall transactions volume on USD sale/purchase in the foreign exchange markets decreased by 17.0 percent and constituted 73.5 million US dollars. In October the volume of transactions of the National Bank of the Kyrgyz Republic on USD purchase constituted 17.5 million US dollars, and on USD sale – 20.2 million US dollars. The volume of transactions of commercial banks on the USD purchase/sale decreased by 24.4 percent in comparison with September and constituted 35.8 million US dollars.
The USD dynamics in exchange offices was increasing and only at the end of the month after a considerable growth there was a certain short-time decrease. In general, the weighted average USD selling rate in exchange offices increased by 6.2 percent and constituted 38.5700 KGS/USD by the end of the month. The USD selling rate in exchange offices was 0.03 som higher than the weighted average rate in the inter-bank foreign exchange markets. The daily average fluctuation of USD selling rate in exchange offices increased from 0.34 to 0.39 percent, and the average margin on USD buying/selling transactions increased from 0.5 to 0.59 percent.
EUR exchange rate dynamics in currency exchange offices was also formed mainly under the influence of its dynamics on the external markets. Within a month, there was a tendency for EUR decrease and only at the beginning and at the end of the month there was a certain increase. In general in the reporting period, the weighted average EUR selling rate in exchange offices decreased by 4.4 percent and constituted 50.1098 KGS/EUR by the end of the month. The daily average fluctuation of EUR selling rate increased from 0.43 to 0.44 percent and the average margin on buying/selling transactions increased from 0.74 to 0.83 percent.
The RUB exchange rate in currency exchange offices in the first decade of October increased, after that there was a tendency for RUB decrease and at the end of the month the RUB exchange rate increased again. In general, the monthly weighted average RUB selling rate in exchange offices decreased by 1.7 percent and constituted 1.4023 KGS/RUB by the end of the reporting period. The daily average fluctuation of RUB selling rate decreased from 0.35 to 0.28 percent whereas the average margin decreased from 0.99 to 0.95 percent.
The KZT exchange rate in currency exchange offices was mainly increasing over the whole month, and only at the end of October there was a certain decrease. In general, the monthly weighted average KZT selling rate in exchange offices increased by 5.1 percent and constituted 0.3199 KGS/KZT by the end of the reporting period. The daily average fluctuation of KZT exchange rate increased from 0.24 to 0.31 percent whereas the average margin increased inconsiderably from 1.1 to 1.2 percent.
In October, the total volume of currency buying/selling transactions in currency exchange offices increased by 3.6 percent and constituted 2512.2 million soms. The growth of transactions volume was noted for USD and RUB. As a result, the share of transactions with USD increased to 62.6 percent and with RUB by 16.4 whereas with EUR, and KZT decreased to 9.1, 11.0 percent correspondingly. The share of transactions with other currencies decreased from 1.3 to 0.9 percent.