I. Methodological base, Concepts, Definitions, and Classifications

• Methodological base: The methodological and conceptual framework for the preparation of the international investment position is the sixth edition of the International Monetary Fund's Balance of Payments and International Investment Position Manual (BPM6).

• Definition: The International investment position is a statistical report that reflects at a certain point in time the value of external financial assets and liabilities of residents of the Republic of Kazakhstan. The international investment position of the Republic of Kazakhstan reflects changes that occurred during the reporting period as a result of financial transactions (reflected in the balance of payments), revaluation and other changes.

  An institutional unit is a resident of the Republic of Kazakhstan if the economic territory of the Republic of Kazakhstan is the center of its predominant economic interest.

• Classification system:The international investment position uses a classification similar to that used in the balance of payments statistics for the financial account. Financial assets and liabilities are classified as follows:

  – by functional category – direct investments, portfolio investments, derivative financial instruments and stock options for employees, other investments, reserve assets;

  – for financial instruments – equity instruments and investment fund units, debt instruments (cash and deposits, debt securities, loans and borrowings, insurance, pension and standard guarantee programs, special drawing rights, trade loans and advances, other claims/liabilities);

  – by institutional sector – central bank, banks, public administration, other sectors, which are divided into two subsectors-other financial organizations and non-financial organizations, households and non-profit organizations serving households (NCODH);

  – by maturity (for debt instruments) – short-term (with an initial maturity of one year or less) and long-term (with an initial maturity of more than one year).

  The difference between external financial assets and liabilities represents a net investment position, which can be positive (then the country is a net lender-investor relative to the rest of the world) or negative (then the country is a net borrower).

II. Data coverage

• Statistical coverage: The International Investment position covers all resident's foreign financial assets and resident's liabilities to non-residents. Branches of foreign companies established on the territory of the Republic of Kazakhstan are considered residents. International organizations located on the territory of the Republic of Kazakhstan, regardless of the duration of their activities, are considered non-residents.

• Geographical coverage: The economic territory of the Republic of Kazakhstan coincides with its geographical territory within the state border, with the exception of embassies, consulates and other official bodies of foreign states, which are considered extraterritorial in relation to the economy of Kazakhstan. Embassies, consulates, military bases and other official bodies of the Government of the Republic of Kazakhstan abroad belong to the economic territory of the Republic of Kazakhstan.

III. Accounting principles 

• Valuation:Traded equity and debt instruments are measured at market value. Non-tradable instruments are recorded at face value. Monetary gold is accounted for using the London Precious Metals Market Association's (LBMA) morning fix of the previous day's reporting date.

  International investment position data is generated in US dollars. When calculating the balances of foreign assets and liabilities at the beginning and end of the reporting period, if they are denominated in other currencies, the conversion to US dollars is made using the rates established by the National Bank on these dates, and cross-rates. The translation of financial transactions taken into account when reconciling the flows and reserves of an international investment position into US dollars is carried out using the exchange rate set by the National Bank on the date of the transaction, or the cross-rate. If there is no information about the transaction dates, the average quarterly exchange rate is applied.

  Accounting basis: External assets and liabilities are primarily recognized on an accrual basis. The process of aggregating indicators complies with the international standard: transactions are netted separately for the same type of asset and for the same type of liability, with the exception of derivative financial instruments in the reserve assets of the National Bank and in the National Fund, reflected by the Public Administration sector.

IV. Main information sources

• Direct investments: Sources of information are statistical and administrative reports of banks, other financial and non-financial organizations, including branches of foreign companies and government agencies, administrative reports of individuals, financial statements of individual organizations, and the National Bank of Kazakhstan's own estimates.

• Portfolio investments: Data from statistical reports provided by professional participants in the securities market (brokers, dealers, investment portfolio management organizations, nominee holders and registrars of securities), banks, and the unified accumulative pension fund. Data on the operations of the National Fund is compiled on the basis of the global custodian report.

• Derivative financial instruments and stock options for employees: The source of data is the statistical and administrative reports of banks, other financial and non-financial organizations, accounting data of the National Bank of Kazakhstan and reports of the global custodian on the assets of the National Fund.

• Other investments: Sources of information are statistical and administrative reports of banks, other financial and non-financial organizations, including branches of foreign companies and government agencies, administrative reports of individuals, financial statements of individual organizations, accounting data of the National Bank of Kazakhstan and reports of the global custodian on the assets of the National Fund, own estimates of the National Bank of Kazakhstan (on transactions of individuals).

• Reserve assets: Data of the accounting statements of the National Bank of Kazakhstan and reports of external managers.

V. Practical features of data development

• Direct investment: To better account for direct investments in other sectors of the economy related to equity participation and reinvested income, the National Bank analyzes the financial statements of companies, analytical portals and mass media on large transactions and the market value of direct investments. It also uses information from banks about customer payments (transfers). Based on the results obtained, the reporting data can be adjusted.
  The negative value of unquoted shares and other equity instruments of Kazakhstani companies is reset to zero, except in the following cases:
  - when the company is at the initial or final stages of activity,
  - negative value is observed for a short period of time with a high turnover of the company's assets (that is, provided that the company's assets can be converted into cash before its liabilities are due to be paid,
  - when foreign shareholders have assumed or acted as guarantors for all the company's obligations (both internal and external).
  Transactions on real estate of individuals abroad are written off by other changes due to the lack of information on the balances (stocks) at the beginning (end) of the period.

• Other investments: Evaluation of transactions of individuals with foreign currency in cash. Information from banks and the National Bank on customer payments (transfers) is also used.

  Transactions of individuals with foreign currency in cash, on accounts with foreign banks are written off by other changes due to the lack of information on balances (reserves) at the beginning (end) of the period.

VI. Other Aspects

•  Additional information: Additional data is distributed on a quarterly basis, such as:

  – international investment position by type of economic activity of residents, geographical structure of assets and liabilities,
  – cross-tables on external liabilities of residents of Kazakhstan: by type of economic activity and main countries, by 10 countries-major investors and by type of economic activity,
  – tables on direct investments in the direction of investment.

• Other: The quarterly publication of the reporting data is accompanied by an analytical commentary in the publication "Balance of Payments and External Debt of the Republic of Kazakhstan".