ALMATY, Nov 12 (Reuters) - Kazakhstan will free up about $3
billion for its cash-strapped banks by cutting minimum reserve
requirements to combat the global credit crunch, central bank
chairman Anvar Saidenov said on Wednesday.
He said the central bank saw the current account in surplus
for 2008 and the first half of 2009, adding that pressure on the
national tenge currency was manageable.
Banks face debt repayments of $12 billion next year amid
tight refinancing conditions and rising levels of bad loans as
the economy slows down and businesses and individuals find it
hard to repay loans.
Saidenov said the reserve requirements would be cut from
Nov. 18 to two percent from five percent on domestic liabilities
and to three percent from seven percent on foreign debt.
"According to our calculations this should free up about 350
billion tenge ($2.9 billion) for the banks," he told reporters.
The measure is part of the state's broader economic rescue
package that also includes capital injections of $3.5 billion
for the four largest banks and $5 billion in loans for key
industries and small businesses.
The government, which had originally earmarked $5 billion
for capital injections, is considering offering the rest to
smaller banks. "I do not rule out that this recapitalisation
program will be extended to the top ten banks," he said.
Analysts say the stable exchange rate of the tenge is
crucial for the banking sector in an economy that heavily relies
on dollars for trade and loan contracts.
Booming investment transformed the ex-Soviet nation into the
biggest regional economy but the credit crisis has ended
Kazakhstan's double-digit growth.
A fall in global oil prices to less than half their July
peak has raised concerns about Kazakhstan's highly leveraged
economy. Oil accounts for 60 percent of Kazakh exports.
The falling prices for oil and metals, Kazakhstan's key
exports, in turn have sparked fears of the tenge's potential
depreciation. But Saidenov said the country's balance of
payments remained strong in the first nine months of 2008.
Current account surplus was nearly $10 billion in
January-September, according to preliminary data, compared to a
$5.4 billion deficit in the same period of 2007.
The central bank has kept the tenge virtually pegged at
around 120 tenge against the dollar throughout this year by
intervening on the domestic market.
Despite lower commodity prices, Saidenov said he saw the
current account surplus widening further in the fourth quarter.
"If prices remain at their current levels the situation will
be the same in the first half of the next year," he said. "The
pressure (on the tenge to devalue) has increased a bit, but it
is generally manageable."
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