Market news

Domestic FX Market

                    Open       High       Low      Close
USDKZT   123.44   126.42   123.24   126.37

The month of August was one the most complicated months in terms of liquidity on the FX and Money Market. The market players continued to buy the US dollar from 123.20 to 126.40. The reasons for that were the same as in July: continuous capital repatriation, refinancing gaps in local banks. As a result, money market rates rose to 6-year highs, reaching 12-15% overnight. The National Bank prevented the sharp depreciation of the tenge, regularly intervening the market. According to our estimates, the central bank sold around 4 billion dollars to stop sharp fall of the tenge, losing a substantial part of gold and currency reserves. However, the NBK took some measures to provide KZT liquidity on the market, implementing swaps operations and postponing the implementation of new reserve requirements from August 29th to October 9th.

International FX Market

                      Open      High        Low      Close
EURUSD   1.3675   1.3839   1.3358   1.3628

EUR marked 6-week low against the US dollar on the first half of the month due to concern over European exposure to problematic US credit markets and compensated on the second half on poor US economic data. 

                      Open      High        Low      Close
GBPUSD   2.0297   2.0462    1.9651   2.0151

GBP also sharply dropped from 2.0462 to 1.9651 on US credit market concerns and back to 2.01s on resumed carry trade.
Money Market and Securities

The National Bank (NBK) and the Ministry of Finance issued 28-day, 364-day notes and 15-year bonds in August 2007.

Economy

• Kazakhstan’s GDP rose by 10.2% in January-June 2007 compared with 9.3% in the same period of 2006

• Kazakhstan’s industrial production rose by 5.6% in January-July 2007 compared with 5.9% in the same period of 2006.

• Kazakhstan’s combined oil production rose by 5.4% in January-July 2007 on the year to 39.0 mln metric tons.

• Net gold and foreign currency reserves fell to $21.73 bln by August 15th 2007 from $23.40 bln by July 31st 2007. Total international reserves, including the National Fund, decreased by 4.1% to reach $39.79 bln.

• The State Statistics Agency reported 0.7% inflation in August 2007. Year-to-year CPI (September’06-August’07) rose to 9.49%. Year-to-date CPI (January’07-August’07) rose to 6.37%.

• July 2007 monetary base increased by 1.8% over June 2007 up to 1.7 trln tenge.

• For the period of January-June 07 the trade surplus reached +$7.01 bln, the third-month-in-a-row decrease by 5.1% compared to the same period of 2006 (+$7.39 bln).