ASTANA – The National Bank of Kazakhstan (NBK) reported a significant improvement in the current account balance, with a surplus of $0.8 billion in the first half of 2024, compared to a deficit of $5.0 billion in the same period of 2023, according to the NBK’s quarterly report Kazakhstan Macro and Market Overview, published on Aug. 7.
Photo credit: Outlook Business
This shift was attributed to a reduced income balance deficit and decreased imports across various product categories, including consumer, intermediate, and capital goods.
On May 17, Fitch Ratings reaffirmed Kazakhstan’s sovereign credit rating at ‘BBB’ with a stable outlook. Inflation in Kazakhstan accelerated to 8.6% year-on-year in July, up from 8.4% in June.
The tenge depreciated by 3.8% year-to-date to 471.84 against the US dollar in the first half of 2024. A seasonal increase in foreign exchange demand due to summer vacations and reduced foreign exchange sales from the National Fund contributed to the tenge’s weakening by midyear.
In the second quarter of 2024, the Ministry of Finance issued fixed-coupon government securities totaling 2.0 trillion tenge, with around 50% maturing in 5 to 10 years. Despite the easing of monetary policy and a slowdown in inflation, yields on these securities increased by 150-200 basis points compared to the previous quarter. This increase was driven by the need to finance the budget deficit and greater involvement of market investors in government securities auctions with maturities of five years or more.
Investor participation in these auctions remained strong, with market demand exceeding supply by an average of 1.8 times, particularly for medium-term maturities. However, investor participation in government securities auctions decreased to 57.2% in the second quarter of 2024, down from 65.6% in the first quarter and 60.8% in 2023.
