Nurlan Ablyazov
ALMATY, April 8
(THE GLOBE)
�Actually, the situation with tenge may be explained simply enough: the main reason is a crumbling reduction of the gold and hard currency reserves of our country within the last weeks�, the Kazakhstan financial expert stated on April 8 in his exclusive interview to THE GLOBE in Almaty.
The point is, that according to REUTERS, the pure gold and hard currency reserves are presently US$ 1.06 billion, while during the pre-election campaign that they were approximately US$ 2 billion. This drop was caused by enormous payments on interest under the foreign loans.
Such an abrupt fall made the National Bank (which was previously the seller of the foreign currency in the domestic market) buy dollars. The NB had to timely pay interest on the loans. The National Bank has accumulated significant reserves of tenge from autumn to spring. Now it had to purchase dollars, as it was high time to pay to the creditors. The fluctuating tenge rate was announced. Hard currency is to be obligatorily sold at the exchange. None of the market participators, except the National Bank actually had tenge (all of them waiting for devaluation, had purchased the maximum amount of hard currency). The National Bank exercises complete sway in the market. As if to confirm the expert�s version, on April 8 the head of the National Bank Kadyrzhan Damitov declared that � on April 8 the National Bank has purchased at the exchange a significant part of currency �.
On April 8 about US$ 7.8 million was sold at the exchange. The average exchange rate was 112.8 tenge per dollar.
The auction volumes increased due to the obligatory sale of hard currency by the exporting-enterprises. In the inter-banks market the �demand / offer� rating varies from 109 to 119. On the previous day, on April 7, the auction volume was about US$ 2 million, the average exchange rate was approximately 118. For the time being, the National Bank is interested in reducing the US dollar exchange rate. The real trend complies with the wishes of the main exchange player.
�The National Bank is hardly interested in tenge emission in the nearest future. But a single source replenishing only non-cash tenge may destabilize the situation�, another well-informed financial informant said.
The matter is that the Finance Ministry should weekly pay about US$ 2.5 billion tenge under its liabilities on the internal debt. About 30% of these liabilities were distributed between the Pension Funds. This, due to the peculiar rules determined for these Funds, may be easily bound and prevented from flow to the hard currency market. Under the current situation, when the government is hardly trustworthy, the remaining 70% may penetrate the hard currency market. This would automatically mean a 10% devaluation/month, if we take into consideration that the total quantity of non-cash tenge outside the National Bank is about 80 billion tenge. It is possible to bind this money under conditions very profitable for the holders of State securities. That in its own turn, is a potential beginning of a financial pyramid. Our informant considers that our situation in this case may develop in the Russian way.
A well-known politologist declared to THE GLOBE, that if the government does not manage to realize the real economic reforms, first of all in the production sector, today�s actions of the National Bank, which seem competent enough, may turn out to be a soap-bubble. Indeed, only the big enterprises-exporters are in a profitable position. Unlike when Russia faced devaluation, where because of the significant proportion of roubles which were in circulation, all of the goods were swept away from the shops; in Kazakhstan the producers have practically nothing to offer to the market.
In expert�s opinion, for the time being the external debts are paid mainly at the population�s expense. Actually, the government reduces the external debt owing to the internal one. On the whole, the politologist believes that maybe for the first time in Kazakhstan, economic decisions, which are obviously belated in respect to the extremely high tenge rate during the pre-election period, give prior way to the economy.
As it became known, the extraordinary conference of the Houses of the Parliament will be held on April 15. The parliamentarians, who are evidently dissatisfied with the lack of information about the coming devaluation of tenge may criticize Balgimbaev�s government.
Will they demand his head?
THE GLOBE will tell you.
MOSCOW, April 8 (AFP)
Uzbek President Islam Karimov said Thursday he opposed Russia�s plans to set up a military base in neighboring Tajikistan, Interfax reported.
�Why create a military base in Tajikistan?� Karimov demanded, adding that the base would heighten security concerns throughout the Central Asia region, the news agency reported.
The creation of the base in southern Tajikistan near the Afghan border was agreed during a visit on Wednesday to Dushanbe by Russian Defence Minister Igor Sergeyev.
The agreement is to be signed in Moscow by Russian President Boris Yeltsin and his Tajik counterpart Emomali Rakhmanov.
Uzbekistan has distanced itself from Russia most recently by dropping out of a Commonwealth of Independent States (CIS) collective security agreement this month along with Georgia and Azerbaijan.
Russia has responded to their withdrawals by boosting defence activities in Armenia and Tajikistan.
Tashkent, which considers itself a Central Asian leader, has said it will maintain bilateral defense agreements with Russia, but the former Soviet republic has become increasingly outspoken against Russia�s attempts to interfere in the region.
All Over the Globe is published by IPA House.
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