BAKU, Azerbaijan, July 19. Dollarization of deposits in Kazakhstan continues to decline, the National Bank of Kazakhstan (NBK) told Trend.
According to the source at the NBK, by the end of 2022, this indicator decreased to 31.6 percent from its peak of 38.4 percent in February 2022. In April 2023, the share of foreign currency deposits reached its lowest level in over 15 years, standing at 29.3 percent.
The National Bank implemented measures to ensure financial and price stability throughout 2022, including raising the base rate from 9.75 percent in January to 16.75 percent in December. During the first half of 2023, the base rate remained at the same level, aiming to slow down price growth in the medium term.
"The increase in the base rate was accompanied by a set of measures to ensure stability in the financial market. The maximum recommended rates of the Kazakhstan Deposit Guarantee Fund for deposits of individuals were raised, and the maximum deposit guarantee amount for savings deposits in tenge was increased from 15 million tenge ($33,716) to 20 million tenge ($45,000) at the beginning of 2022," the source said.
Additionally, as the bank noted, a Program for the Protection of Tenge Deposits was implemented jointly with the Government, offering a 10-percent compensation (premium) for deposits of individuals in the national currency. These measures stabilized the bank's funding base, and by December 2022, the volume of deposits reached a historical high of 30.9 trillion tenge ($69.5 billion).
"The geopolitical situation and unfavorable conditions in the global financial markets contributed to increased volatility in the national currency. Nevertheless, as a result of the mentioned measures, the exchange rate of the tenge against the US dollar, which reached a record weakening at 512.17 tenge in March, strengthened to 414.79 in May 2022," the source added.
The improvement in the balanced currency market was achieved through further expansion of market principles in currency trading, as well as high energy prices. Overall, the measures taken by the National Bank contributed to macroeconomic stabilization in the country and had a positive impact on the financial sector, the NBK concluded.