ASTANA — Kazakh Mazhilis (lower house of Parliament) Deputy Azat Peruashev proposed during a recent Mazhilis plenary session to diversify Kazakhstan’s foreign exchange portfolio, renounce one currency dominance and increase the share of gold reserves.
Peruashev proposed in his address to Kazakh Prime Minister Bakytzhan Sagintayev and National Bank Chair Daniyar Akishev protecting the gold and foreign exchange reserves because of geopolitical and macroeconomic risks.
“The gold and foreign exchange reserves are an essential factor in ensuring the stability of the national financial system and the national currency, tenge. The issue of maintaining their safety and liquidity is one of the main priorities of a state’s economic policy,” said Peruashev.
Kazakhstan’s gold and foreign exchange reserves consist of the National Bank’s reserves and the National Fund’s resources. Their total amount exceeds $90 billion including the National Fund’s assets going beyond $59 billion and the National Bank’s reserves exceeding $31 billion, added Peruashev with reference to the National Bank.
“Guaranteeing the safety of Kazakh gold and foreign exchange reserves is becoming more urgent with the processes in the world economy. The emergence of the geopolitical and economic conflicts along the West and Russia, U.S. and E.U. lines cause the threats to the international financial system and risks the high currency volatility and the international financial obligations,” he said.
“The active protectionist U.S. policy influences on some countries and supranational organisations’ reciprocal aspiration to limit the trade relations with the world’s first economy, U.S., and to find an alternative to the U.S. dollar as a mean of payment and reserve currency,” said Peruashev.
Specifically, the deputy notes China’s transition into the mutual settlement in Chinese national currency, the world’s second economy, with Russia, Iran and other countries.
“The expansion of this confrontation will make the dollar and the liquidity value of U.S. securities less predictable,” said Peruashev.
The foreign currency and securities in the National Bank reserves account for 57 percent. This figure in the National Fund’s assets is even higher, added the deputy.
According to 2016 figures, approximately 40 percent of the National Fund resources consisted of U.S. currency and securities, 22 percent Eurozone’s currency and securities and 10 percent from the currency and securities of Japan. China’s currency and securities are not even represented in this portfolio, said Peruashev.