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Kazakhstan's foreign exchange reserves up as gold prices increase

Finance Materials 9 July 2020 12:06 (UTC +04:00)
Kazakhstan's foreign exchange reserves up as gold prices increase

BAKU, Azerbaijan, Jul. 9

By Nargiz Sadikhova - Trend:

Kazakhstan’s foreign exchange reserves amounted to $32.9 billion in Jun. 2020, having increased by $3.9 billion or 13.4 percent since the beginning of the year, Deputy Governor of the National Bank Aliya Moldabekova said, Trend reports with reference to the National Bank.

Moldabekova noted that these are the preliminary results. Foreign exchange reserves increased by $1.3 billion compared to last month.

“These dynamics are associated both with gold price increase and increase in foreign exchange assets. In June, we observed an influx of funds into the foreign currency accounts of second-tier banks at the National Bank,” Moldabekova said.

She noted that gold accumulation as a reserve asset is fully justified, taking into account current risks.

“The US dollar retains the status of the world reserve currency, however, in the face of a widespread decline in real rates, the demand for gold as an investment asset is growing. Since the beginning of the year, the price of gold has risen from $1,521 to $1,800 per ounce or by more than 18 percent,” she said.

In turn, she said, based on operational data the assets of National Fund decreased by $0.7 billion in Jun. having amounted to $57.7 billion. Some 608 billion tenge ($1.4 billion) of transfers from the fund were carried out in Jun., at the same National Fund received 6.3 billion tenge ($15.3 million) of income.

To fulfill the obligations on the allocation of transfers to the state budget, the National Bank sold about $1.4 billion or 577 billion tenge of National Fund’s assets at the foreign exchange market.

“This June investment income of the National Fund amounted to about $690 million, which partially offset the withdrawals from the fund. The stock market growth, which amounted to about 2.6 percent in June, was accompanied by growth in the bond markets by 0.5 percent and gold by 2.6 percent,” Moldabekova said.

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