Kazakhstan’s National Fund Loses Money

Since the beginning of the year, it lost about $1 billion

The foreign currency assets of Kazakhstan’s National Fund are decreasing. Since early January the fund lost $1 billion and now possesses $57.7 billion, according to Aliya Moldabekova, deputy head of the National Bank.

As the official noted, the main reason for the decrease in assets is money transfers to the state budget in the amount of about $900 million. 

“We have sold $720 million on the foreign currency market; the rest of the transfers was made in tenge, which was accumulated in the last two months of last year,” she said.

At the end of January, investment revenue of the National Fund became negative and reached (-) $340 million (-0.6%). About $150 million of this was the result of the shares’ price drop, and $140 million was lost because of the bond portfolio decreasing amid the sharp decline of the MSCI World and EMBI indexes in January by 1% and -0.43% respectively. 

However, during the first days of February, the stock market rebounded and the National Fund has obtained $440 million in investment revenue. These gains covered all losses in January. 

Concerning gold and foreign currency reserves, they stayed completely the same over the entire January at about $35.6 billion. Assets in freely convertible currency increased though, thanks to the Asian Development Bank loan of $0.9 billion. 

However, Moldabekova noted that this factor was neutralized by debt payments of $100 million as well as commercial banks’ money withdrawal of $500 million. One particular bank has needed that money for foreign currency bonds payment. The gold portfolio decreased by $0.3 billion amid the gold price decrease from $1,891 to $1,853 per ounce or 2%. According to the official, given new achievements in vaccine development, as well as business rebounding, gold prices are currently prone to slide down.

In 2020 the gold and foreign currency reserves of Kazakhstan’s National Bank increased by $6.7 billion to $35.7 billion in total. The National Fund’s assets reached $58.7 billion at the end of last year, decreasing by $3.1 billion.
 

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