Kazakhstan’s foreign exchange reserves increase as gold prices go up
BAKU, Azerbaijan, Aug. 12
By Nargiz Sadikhova - Trend:
Kazakhstan’s foreign exchange reserves grew by $2.4 billion tenge in July compared to June having reached $35.3 billion mainly due to increase in gold reserves, Deputy Governor of the National Bank Aliya Moldabekova said, Trend reports with reference to the National Bank.
“Against the background of uncertainty of the global economy, in particular caused by the COVID-19 pandemic, as well as the weakening of the US dollar to tenge exchange rate, the price of gold over the past month rose from $1,771 to $1,975 per ounce, or by 12 percent. The growth of the gold portfolio of Kazakhstan’s reserves amounted to $2.3 billion, which served as the main driver of the growth of foreign exchange assets overall, which, for the first time since 2012, exceeded the $35 billion mark,” she said.
Moldabekova said that an additional factor supporting the rise in the price of gold is the significant amount of excess liquidity in US dollars at the disposal of investors and other market participants after the US authorities took unprecedented measures to support the economy in the fight against the consequences of COVID-19 spread.
“At the same time, if the US Federal Reserve limits itself to the measures already taken to maintain economic activity in the country, as well as if the situation with the COVID-19 virus stabilizes, volatility in the gold market will continue. We already saw a drop in the price of gold by almost $150 per ounce,” she said.
The deputy minister added that given the unstable situation at global market, the National Bank will continue to accumulate gold as a reserve asset.
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