At the end of July, the tenge exchange rate weakened by 0.5% to 474.15 tenge per US dollar. The average daily trading volume on the Kazakhstan Stock Exchange decreased from 183 to 170 million US dollars over the course of the month, contributing to a total trading volume of 3.7 billion US dollars.

In July, currency sales from the National Fund to ensure transfers to the republican budget reached 506 million US dollars, which comprised 14% of the total trading volume, with daily amounts capped at 23 million US dollars. While managing transactions involving the National Fund assets, the National Bank followed the principle of market neutrality, ensuring a consistent and even-handed approach to foreign currency sales. This strategy is aimed to minimize the impact of National Fund operations on the foreign exchange market.

To sustain the foreign currency share of the Pension Fund’s assets at 30%, the National Bank continued its purchase of foreign currency in July, totaling 275 million US dollars, which comprised approximately 7% of the overall market volume.

As part of the Government’s decision to purchase shares of “Kazatomprom” JSC into the National Fund, the National Bank conducted a conversion by selling part of the National Fund’s foreign currency assets into the National Bank’s gold and foreign exchange reserves. To maintain market neutrality and mirror this operation in the foreign exchange market, the National Bank began evenly selling the acquired volume starting from mid-July.

Thus, in July, the volume of sales from the National Bank’s gold and foreign exchange reserves within the framework of the specified operation amounted to 115 million US dollars. In August 2024, the volume of currency sales is expected to be in the range from 230 to 250 million US dollars.

Looking ahead to August 2024, based on preliminary government forecasts for transfers to the republican budget, the National Bank anticipates foreign currency sales from the National Fund ranging between 500 and 600 million US dollars.

Additionally, foreign currency purchases to maintain the foreign currency share of the Pension Fund’s assets in August are expected in the range from 200 to 250 million US dollars.

Remaining committed to ensure transparency, the National Bank pledges to continue providing comprehensive information on all foreign exchange market transactions. In the short term, the trajectory of the tenge will be driven by market expectations, quarterly tax payments, global market conditions, and geopolitical developments. The National Bank reaffirms its dedication to the flexible exchange rate regime aimed at preventing imbalances and safeguarding gold and foreign exchange reserves.

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