Multi-currency basket

Multi-currency basket

From February 2011 the National Bank has conducted a monetary policy within the framework of a managed floating exchange rate of tenge. This mode involves the participation of the National Bank in the foreign exchange markets only in order to smooth out spikes of tenge exchange rate without affecting the formation of the general dynamics trend of the exchange rate given by the market predispositions. In carrying out the exchange rate policy the National Bank has an impact on the dynamics of the exchange rate of the tenge to the dollar. Meanwhile against the backdrop of the integration processes trade and foreign economic relations of Kazakh connections with major trading partners as well as strengthening of mutual fluctuations of major world currencies the country's central bank announces the need for improved approaches to exchange rate policy. The purpose of introduction of a multi-currency basket in Kazakhstan is to change the operational target during the exchange rate policy: instead of being attached to the dollar the National Bank will focus on the dynamics of three currencies. As part of the implementation of monetary policy the National Bank of Kazakhstan will carry out interventions affecting the dynamics of the exchange rate of the tenge against the U.S. dollar thereby adjusting the value of a multi-currency basket. The National Bank notes that the main advantage of the introduction of a multi-currency basket regime will be a gradual reduction of the role of the U.S. dollar in the domestic market and in foreign trade, the reduction of speculative behaviour on the market and easing-off of the negative effects from the inflow and outflow of speculative capital to the foreign exchange and money markets in Kazakhstan.

Resources

As production processes and technology develop, less expensive production methods and synthetic raw material analogues appear. In addition, IMF economists have proven the existence of long-term cycles, which the prices of all kinds of raw materials (energy carriers, metals and food) depend on: certain raw material prices have been following other raw material prices for 350 years. Now super-soft monetary policy and increasing demand from developing countries are the basis for growing prices. It helped raw material prices to recover quickly after the fall in 2008, but many economists are confident that a long-term cycle of increase in raw material prices is coming to an end now. This will result in a considerable decrease in «wealth transfer» from the countries importing raw materials to exporting countries. Countries exporting raw materials will become poorer while importers will again be able to spend money on their development. For example, the IMF expects a fall in the index of primary goods prices by 11 percent until 2018.

ESCAP FORUM

Almaty hosted an ESCAP forum. Here representatives of the regulatory authorities of the countries of Central Asia and the Caucasus were able to share their experiences, views with the regulators of the financial markets of the Asia -Pacific region. Sustained economic growth in North and Central Asia in the decade prior to the global economic crisis had been largely driven by strong demand and commodity prices. However, not all regions of the country were able to take advantage of the situation and begin diversifying the economy. The introduction of a new concept of budgeting has also favoured the Kazakh economy. Conventionally, in the government the new approach is called The Result-Oriented Budget. This is a three-year plan of work of government agencies, development institutions and regulators of different markets, which contains clearly indicated timeframes and macroeconomic goals and objectives.

Money transfers

Banks are going online. Increasingly more services are now provided through internet facilities. The most popular are loan payments and replenishment of deposit through wages. Already 20 percent of Kazakhstan people took advantage of the service. It is worth noting that the average rate on loans is significantly higher. There is also growing demand for transfers. If to the international markets money is sent through systems of European and American companies then in the country means travel from card to card. That is convenient for the consumer.

 

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