CIS Economic Spotlight 29/08/2023

Retail demand for FX in Kazakhstan increased significantly in July. The National Bank of Kazakhstan published data on FX sales and purchases by the population in July. The population remains a net buyer of foreign currencies. The net volume of FX purchases doubled compared with June, totaling KZT 216.9 bln in tenge equivalent. Negative for KZT. We note that the volume of net purchases of the ruble by the population surged by 16x versus June, totaling KZT 6 bln in tenge equivalent. Nonetheless, in annual terms, net purchases of the Russian currency contracted by 10%. We also note a reversal of demand for the yuan: while net sales of the Chinese currency totaled KZT 52 mln in June, July saw net purchases of KZT 69.3 mln. We expect demand for FX in Kazakhstan to normalize in the short term.