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Foreign Exchange Market  

(December 2008) 

 

On the foreign exchange market in December, there was kept a tendency of the USD exchange rate increase, however its growth rates in the domestic foreign exchange market as well as on the world market considerably decreased. Foreign currencies exchange rate increase was stipulated by the demand increase over the currencies supply as a result of commercial banks demand for foreign currency for the purpose of payment for goods and services import as well as due to volume increase of inter-bank credit transactions with non-resident banks. In the reporting month, the National Bank of the Kyrgyz Republic participated in the domestic inter-bank foreign exchange market as the USD purchaser and seller.  

In general in December, the weighted average USD rate in the inter-bank foreign exchange markets increased by 0.8 percent and constituted 39.5934 KGS/USD by the end of the month, whereas the USD discount rate increased by 0.3 percent and constituted 39.4181 KGS/USD.  

The overall transactions volume on USD sale/purchase in the foreign exchange markets increased by 28.5 percent in comparison with the previous month and constituted 86.5 million US dollars. In December, the volume of transactions of the National Bank of the Kyrgyz Republic on USD purchase constituted 12.5 million US dollars, and on USD sale 30.1 million US dollars. The volume of transactions of commercial banks on the USD purchase/sale in the foreign exchange markets increased by 32.0 in comparison with November and constituted 43.9 million US dollars. 

The USD exchange rate in exchange offices was increasing within the month with slight fluctuations. In general, the weighted average USD selling rate in exchange offices increased by 1.0 percent and constituted 39.7217 KGS/USD by the end of December. The USD selling rate in exchange offices was 0.06 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 decreased from 0.09 to 0.04 percent, and the average margin on USD buying/selling transactions decreased from 0.44 to 0.31 percent. 

EUR exchange rate dynamics in currency exchange offices was also formed mainly under the influence of the USD dynamics on the external markets. In the first half of the month, the EUR selling rate in foreign exchange offices was rapidly growing, after that there was a certain EUR exchange rate decrease and at the end of December it increased again. In general in December, the weighted average rate of EUR selling rate in exchange offices increased by 9.1 percent and constituted 55.2291 KGS/EUR by the end of the month. The daily average fluctuation of EUR selling rate in December increased from 0.37 to 0.51 percent and the average margin on buying/selling transactions increased from 0.67 to 0.71 percent. 

The RUB exchange rate in currency exchange offices was similar to its dynamics in foreign markets. Within the first half of the month the RUB exchange rate was fluctuating in a narrow range, then in the third decade of the month there was a certain decrease. In general, the monthly weighted average RUB selling rate in exchange offices decreased by 8.4 percent and constituted 1.2903 KGS/RUB by the end of the reporting period. The daily average fluctuation of RUB selling rate increased from 0.15 to 0.29 percent whereas the average margin increased from 0.85 to 1.0 percent. 

The KZT exchange rate in currency exchange offices was fluctuating in a narrow range, (0.3242-0.3260 KGS/KZT). In general, the monthly weighted average KZT selling rate in exchange offices was left unchanged at the level of the previous month and constituted 0.3247 KGS/KZT by the end of December. The daily average fluctuation of KZT exchange rate decreased from 0.09 to 0.08 percent whereas the average margin decreased from 0.89 to 0.67 percent. 

In December, the overall volume of currency buying/selling transactions in currency exchange offices decreased by 12.3 percent in comparison with the previous month and constituted 2677.3 million soms. Herewith there was a decrease of the USD and RUB transactions volume, whereas the volume of EUR and KZT transactions on the contrary increased. As a result, the share of transactions with USD decreased by 63.4 percent, whereas with EUR, RUB and KZT increased to 9.5, 14.3 and 11.5 percent correspondingly. The share of transactions with other currencies increased from 1.3 to 0.8 percent.