ь On July 27, 2011, in the course of the session of the Board of the National Bank of the Kyrgyz Republic, the following issues were considered and corresponding resolutions were accepted:  

­ On issuance of collection coins, devoted to 200-year anniversary from the birth date of Kurmanjan Datka (No.40/1); 

­ On approval of the Provision “On the procedure for issuance of the license for the right to perform foreign cash transactions” (No.40/4), which stipulates prolongation of the license validity period up to three years and establishment of the requirement for the minimum amount of working assets of an exchange office in the amount of 100 000 soms and limitation for recurrent acquisition of the license after withdrawal of the license for breach of regulatory legal acts of the National Bank of the Kyrgyz Republic;  

­ On withdrawal of the license of the LLC “Specialized Fund for Banks Refinancing” (no.40/5); 

­ On joint resolution of the Kyrgyz Republic Government and the National Bank of the Kyrgyz Republic “On approval of the Strategy for development of micro-financing for the period of 2011-2015” (No.40/6); 

­ On introduction of changes and amendments to the resolution No.5/7 of the National Bank of the Kyrgyz Republic, dated March 2, 2006 “On approval of the Provision on licensing of the banks activity” (No.40/7); 

­ On introduction of changes and amendments to the resolution No.2/2 of the National Bank of the Kyrgyz Republic, dated February 4, 2004, “On approval of the instruction for arrangement of on-site inspections” (No.40/8); 

Also, reports of the conservator of the OJSC “KyrgyzCredit Bank” and the conservator of the OJSC “Investbank Issyk-Kul” for May and June 2011 were considered and taken into consideration.  

 

 

ь Concerning the situation in the domestic market of the Kyrgyz Republic, the National Bank of the Kyrgyz Republic informs the following:  

The National Bank of the Kyrgyz Republic during implementation of the monetary policy, adopted by the Kyrgyz Republic, adheres to the floating exchange rate regime, which involves formation of the exchange rate through market mechanisms, i.e. based on supply and demand for the relevant foreign currency. 

The current situation in the foreign exchange market of the Kyrgyz Republic, with regard to the seasonal factor, is generally characterized by relative stability.  

Since the beginning of June 2011 due to increase in the supply volume, there was the tendency for weakening of the USВ exchange rate against KGS, which had started in April. As is known, the major source of the foreign currency inflows includes cash transfers of physical entities by money transfer systems. Thus, according to preliminary data for June 2011, the net inflow of foreign currency transfers amounted to 141.9 million USD, having increased by 53.7 million USD as compared to the corresponding period of 2010. Herewith, based on historical data, it should be noted that the largest inflow is registered in the period from April to September, i.e. money transfers as the major source of foreign currency are also subject to seasonal factor. Also, an additional supply of the foreign currency is provided during the tourist season, which peaks just in July and August months. Regarding fundamental factors that affect the USD, we can note the unresolved issue of raising the maximum limit for public borrowings in the United States of America. 

During the period from June 1 to July27, 2011, the official USD exchange rate decreased from 45.3965 KGS to 44.7025 KGS per USD, i.e. by 1.53% or by 0.70 KGS.  

From June 1 to July 26, 2011, the total amount of interventions of the National Bank of the Kyrgyz Republic amounted to 64.80 million USD, including the National Bank sold 26.25 million USD and bought 38.55 million USD. As a result, the volume of net purchase of National Bank of the Kyrgyz Republic on the foreign exchange market amounted to 12.30 million USD.  

The National Bank of the Kyrgyz Republic constantly monitors the situation on financial markets and takes appropriate actions to further ensure a stable situation in the domestic financial market through existing market mechanisms and tools. 

 

 

ь The National Bank of the Kyrgyz Republic informs that in January-June 2011, the Ministry of Finance of the Kyrgyz Republic allocated STBills and STBonds for the total amount of 1.7 billion soms, which is by 13.1 percent lower as compared to the previous year (in January-June 2010, sales of government securities amounted to 1.9 billion soms). Also, the volume of STBills sales decreased by 13.1 percent, while sales of STBonds decreased by 24.7 percent.  

The decrease in sales was due to low demand for government securities. Against the background of demand reduction and high inflation, the profitability rate of state securities increased. Thus, the weighted average profitability rate of STBills in June constituted 18.1 percent, while in December 2010 it amounted to 11.1 percent. Profitability rate of STBonds as per results of May amounted to 19.9 percent, which is by 1.0 percentage points higher than that at the beginning of the year.  

The credit portfolio of banks at the end of June 2011 amounted to 28.6 billion soms, having increased by 8.4 percent. The weighted average interest rate on newly issued credits in the national currency for the reporting period constituted 22.7 percent, having decreased by 1.2 percentage points as compared to the corresponding period of 2010.  

As of the end of the first half of 2011, the system of non-banking institutions, subject to licensing and regulation by the National Bank of the Kyrgyz Republic, included two specialized financial and credit institutions (LLC "Financial Company for Support and Development of Credit Unions", LLC "Specialized Fund for Banks Refinancing"), 207 credit unions; 424 microfinance institutions (including 4 microfinance organizations, 304 micro-crediting companies and 116 micro-crediting agencies) and 274 exchange offices.  

In the first half of 2011, the sector non-banking financial institutions showed good growth rates, contributing to wider coverage of the population with microfinance services. So, at the end of the first half of 2011, the share of NBFI assets was 29 percent and credit portfolio - 49 percent of the overall portfolio of the banking system. At the end of the first half of 2011, assets of non-banking financial institutions reached 17.6 billion soms; from the beginning of the year growth constituted 2.6 billion soms or 18 percent and the credit portfolio of non-banking financial institutions increased to 13.9 billion soms - an increase constituted 2.9 billion soms or 26 percent. The number of borrowers of the microfinance sector increased in the first half of 2011 from 391 thousand to 437 thousand persons or by 11.7 percent. 

Also during the first half of 2011, there was a significant increase in net profit of non-banking financial institutions, which amounted to 718 million soms, which is in two times higher than the net profit for the corresponding period of 2010.  

As of July 25, 2011, the total amount of money in circulation amounted to 47.3 billion soms, while on January 1, 2011, it amounted to 43.3 billion soms. The growth of money in circulation in the last 7 months of 2011 constituted 9.3 percent.  

These indicators of cash in circulation testify that cash in circulation is sufficient to meet the needs of the population. 

 

 

ь The National Bank of the Kyrgyz Republic informs that within the framework of the Housing Finance Program, implemented with support of the German Development Bank (hereinafter referred to as KfW), the Ministry of Finance of the Kyrgyz Republic announces the tender for selection of the partner financial and credit institutions to participate in the Program. The general aim of the KfW Programme is to increase and improve (in terms of accessibility and maturity) credit offers for housing construction and mortgage credits as well as the credits for housing improvements and purchase of housing, which in turn will contribute to improvement and expansion of the Kyrgyz financial market. General aim will be achieved by providing financing for the above-mentioned purposes and allow citizens of the Kyrgyz Republic with middle-income and low-income to get access to credits and improve their living conditions. Credits will be provided by three partner financial and credit institutions, which will be selected to participate in the Program. Partner financial-credit institutions will receive credits in the national currency (KGS) from the Ministry of Finance of the Kyrgyz Republic, on the terms, which will be determined later.  

Banks and microfinance institutions, registered and performing their activities in the Kyrgyz Republic, are invited to participate in the tender. Selection of partner financial and credit institutions will be held in the form of tender in two stages:  

1. preliminary selection of financial and credit institutions; 

2. final selection, which will be based on due diligence by a consultant. The selection will be made by tender commission, which consists of representatives from the Ministry of Finance of the Kyrgyz Republic, KfW as well as a consultant with international experience.  

Institutions, interested in the tender, should contact Altynai Valikhanova, who will provide you with additional information about the tender and the documents, which should be provided. If you have any questions, do not hesitate to contact Altynai Valikhanova at the following e-mail address: altynai.valikhanova @ kfw.de.  

Deadline for submission of applications to the KfW Regional Office at the address: 150 Panfilov Street, Bishkek is August 29, 2011.  

 

 

News of non-banking financial institutions  

 

The National Bank of the Kyrgyz Republic issued licenses/certificates to the following non-banking financial institutions and exchange offices: 

1. PE Danymshanov Emil Mamatkadyrovich (License No. 4736, dated July 26, 2011 for conducting cash foreign exchange transactions). Registration number of the exchange office: 2807. Legal address: 150, Abdrahmanova Street, Bishkek city (exchange office “Jetigen”); 

2. PE Dzholdoshbaev Abdurashid Galiahparovich (License No. 4737, dated July 27, 2011 for conducting cash foreign exchange transactions). Registration number of the exchange office: 2808. Legal address: 300, Kurmanjan Datka Street, Bishkek city; 

3. PE Kutmanalieva Dinara Toktogulovna (License No. 4738, dated July 27, 2011 for conducting cash foreign exchange transactions). Legal address: Sarygulova Street, Talas city, Talas oblast (building of the trade center “Koktom”); 

4. LLC MCC “Barrel” (Certificate No. 388, dated July 27, 2011, for micro-crediting of physical and legal entities). Legal address: 162/16, Moskovskaya Street, Karakol city, Issyk-Kul oblast; 

5. LLC MCC “AKKA-Finance” (Certificate No. 389, dated July 28, 2011, for micro-crediting of physical and legal entities). Legal address: 56, Parkovaya Street, Bishkek city; 

6. LLC MCC “Progress” (Certificate No. 390, dated July 28, 2011, for micro-crediting of physical and legal entities). Legal address: room 8, floor 7, 230 building, Chui Avenue, Bishkek city; 

 

The following certificates and licenses of non-financial credit institutions were cancelled: 

 

Certificate on accounting registration No.148 of the institution MCA “Business-Lux” was cancelled from July 25, 2011 on the basis of the application of self-liquidation, dated July 22, 2011, and decision of the founder, dated July 22, 2011. Legal address: 69, Sovetskaya Street, Cholpon-Ata city, Issyk-Kul oblast; 

License No. 549 of the Credit Union “Aska Too” was cancelled from July 28, 2011 on the basis of and minutes of the general meeting of the credit union participants, dated July 25, 2011. Legal address: 231, J.Sheralieva Street, Naryn city, Naryn oblast; 

License No. 4519 of the PE Yushta Tamara Nikolaevna, dated November 23, 2010, was cancelled from July 29, 2011 on the basis of application on termination of economic activity. Legal address: 164-13, Moskovskaya Street, Bishkek city; 

 

Inter-bank payments 

 

Indices of Inter-bank payment systems (IPS) 

 

Total IPS 

including 

Clearing system 

Gross system 

Volume, KGS 

Items 

Volume, KGS 

items 

Volume, KGS 

items 

Indices from the period of July 25 July 29, 2011 (reporting period)  

Absolute value for a week  

13 907 046 101,67 

29 080 

1 431 408 187,02 

25 913 

12 475 637 914,65 

3 167 

Share of IPS payments (%) 

100,0 

100,0 

10,3 

89,1 

89,7 

10,9 

including (%): 

 

 

 

 

 

 

Net positions of Common Interbank Processing Center 

0,1 

1,2 

0,6 

1,3 

0,0 

0,0 

Outgoing to the Central Treasurer's Office 

17,6 

15,4 

24,5 

16,9 

16,8 

2,5 

Incoming from the Central Treasurer's Office 

22,3 

32,3 

14,3 

36,1 

23,3 

1,6 

Outgoing to the Social Fund 

0,004 

0,1 

0,04 

0,1 

0,0 

0,0 

Incoming from the Social Fund 

0,2 

3,8 

2,4 

4,2 

0,0 

0,0 

Average weekly indices for the previous month 

Absolute Value 

10 835 358 831,80 

27 226 

1 282 952 047,35 

24 727 

9 552 406 784,45 

2 499 

Indexes deviations of the reporting period from the weekly average indexes of the previous month  

Absolute Value 

3 071 687 269,87 

1 854 

148 456 139,67 

1 186 

2 923 231 130,20 

668 

28,3 

6,8 

11,6 

4,8 

30,6 

26,7 

 

 

Indices of the national payment system “Elcart” 

 

As of 

July 22, 2011 

July 29, 2011 

Number of cards in circulation (exclusively of re-issued cards) 

113 675 

114 126 

Number of pos-terminals total,  

including: 

- in banks  

- in trade centers 

561 

 

420 

141 

561 

 

420 

141 

Number of automated teller machines 

149 

149