Foreign exchange reserves grow for third consecutive month

Kazakhstan’s net foreign exchange reserves reached $40.5 billion at the end of August, demonstrating stable growth for three months in a row. According to the National Bank, the foreign exchange assets held by the National Fund reached the $62.6 billion bar, while its net foreign exchange reserves stood at $103.1 billion compared to $100.8 billion in July and $99.3 billion in June. According to Galymzhan Aitkazin, an independent economist and author of the Tengenomika Telegram channel, this is a 10-year high. He also highlighted that Kazakhstan’s external buffers are the most stable they have been in many years. 

Kazakhstani net foreign exchange reserves, a difference between gross reserves and freely convertible currency, rose in August by 1.97% compared to July and by 19.6% compared with the end of the previous year. 

Kazakhstan’s gross foreign reserves reached $42.6 billion in August, marking a 1.9% increase compared to July and an 18.7% rise since the beginning of the year.

Freely convertible currency assets grew by 1.5% over the month, reaching $19.2 billion. Gold reserves increased by 2.2%, amounting to $22.4 billion, with a 20.2% rise since the start of the year. The National Fund’s volume hit its highest level since 2019, reflecting a 2.36% monthly increase and 4.26% growth since the beginning of the year.

The National Bank builds foreign exchange reserves by acquiring surplus foreign currency on the domestic market, left unclaimed by importers or investors, and originally generated by exporters or foreign investors. The acquired currency is then either deposited in foreign banks or used to purchase liquid assets and gold. These reserves can also be used to support the tenge or address balance of payments deficits.

In early September, the Ministry of Finance reported that the value of the National Fund significantly increased in August. In late July it was estimated at around $62.2 billion, while in late August a significant 7.2% increase brought it to around $66.6 billion.