ASTANA – The National Bank of Kazakhstan (NBK) reported a significant improvement in the current account, 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. This is according to the NBK’s quarterly report “Kazakhstan Macro and Market Review” published on August 7.
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This shift was attributed to a smaller deficit in the income account and a decline in imports in various product categories, including consumer, intermediate and capital goods.
On May 17, Fitch Ratings affirmed Kazakhstan’s credit rating at “BBB” with a stable outlook. Inflation in Kazakhstan rose to 8.6% year-on-year in July, up from 8.4% in June.
The tenge depreciated 3.8% against the US dollar in the first half of 2024, closing at 471.84. A seasonal increase in foreign exchange demand due to the summer holidays and lower foreign exchange sales by the National Fund contributed to the tenge’s weakening by mid-year.
In the second quarter of 2024, the Ministry of Finance issued fixed-rate government bonds totaling 2.0 trillion tenge, of which about 50% have a maturity of 5-10 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 due to the need to finance the budget deficit and increased participation of market investors in auctions of government bonds with maturities of five years or more.
Investor participation in these auctions remained strong, with market demand exceeding supply by 1.8 times on average, particularly for medium-term maturities. However, investor participation in government bond auctions declined to 57.2% in the second quarter of 2024, compared to 65.6% in the first quarter and 60.8% in 2023.
