Restrictions can be extended
Although the new restrictions are imposed for a short period – from 30 March to 5 April, in the adverse scenario, the extension of the epidemic of coronavirus in Kazakhstan, they can be prolonged and for a longer time with all the attendant negative consequences for the two leading financial centres of Almaty and Nur-Sultan. Thus, the national Bank will limit till 13.00 time operations in the framework of the implementation of monetary policy. This limitation will affect the operations of the permanent access, including instrument currency swap and repo transactions, conducted on KASE of attracting deposits by the national Bank and operations with cash foreign currency. Recall that the cross-currency swap and repo accounts for the bulk of total turnover of KASE, who have long been reduced. Operation open market, including an auction on placement of short-term notes and Deposit the auction will be carried out by the national Bank as usual.
The week will close Bank branches in the capital and Almaty.
As explained in the Agency on regulation and financial market development (ARRR), the payments and instructions on money transfers from legal entities and physical persons will be carried out without restrictions through remote channels, including Internet and mobile banking. In normal mode will work ATMs and terminals for cash withdrawal, cashless payment for the replenishment of Bank accounts by individuals. And the activities of RSE “Kazakhstan center of interbank calculations” of Bank payment processing banks, Treasury Committee and other market participants will be carried out normally.
In addition, Nur-Sultan and Almaty limits the time of work of exchange offices of authorized banks and organizations from 10.00 to 16.00. The formal reason for the limitation – minimizing the risk of spread of infection in the implementation of exchange operations with cash foreign currency. By the way,
the national Bank explained that the risk associated with the use of cash does not exceed the risk of touching any other surface
and the probability of getting infected banknotes in circulation is insignificant. Tenge banknotes to the same stored for a long time, after collection: unopened – up to 45 days, and after conversion – and at up to 1 year.
A unified approach
With regard to the purchase and sale of cashless foreign currency by legal entities-residents on the domestic foreign exchange market, the national Bank changed the order here. A unified approach to the definition of threshold amount for record registration of foreign trade transactions and to provide supporting documents when buying foreign currency equal to or exceeding $50 thousand in equivalent. In this case
purchased foreign currency should be used for the stated purpose within 10 working days and in case of non-use it is subject to sale back.
As emphasized in the national Bank, the measures aimed at limiting the unjustified speculative demand for cashless foreign currency and to protect the rights and legitimate interests of citizens, interests of society and the state. Before that, the government in pursuance of an order of the head of state took the decision to sell on the domestic market of export currency earnings of subjects of quasi-public sector. Here are related exporting companies, whose authorized capital the state share exceeds 50%, including companies of “Samruk-Kazyna”. The national Bank noted on this occasion that such measures are aimed at stabilizing the exchange rate, ensuring the supply of currency, to prevent unwarranted volatility and will not interfere with the formation of the fundamental trend.
Changes in KASE
Prepared to quarantine changes on KASE. In the period from 30 March to 3 April on the stock exchange will not be trading on the derivatives market, as well as additional sessions on repo instruments and currency swaps. This period changed the rules of bidding, clearing and settlement on the stock market. So,
calculation of weighted average rate of U.S. dollar at the end of the day will be recorded as at 15.30.
It is clear that, restricting time access to market participants and the public in the foreign exchange market, the government strives to protect the current exchange rate of the tenge to the dollar from excessive demand for foreign currency and speculative attacks. In principle, the proposed measures appear softer compared to the restrictions under the special currency regime.
The support of the population and SMEs
But the problem is that at the same time government run financial support of the population, along with small and medium-sized businesses. So, according to the order of the Chairman ARRR on approval of the procedure of suspension of payments of amounts of principal and interest on loans of the population of SMEs affected by the imposition of emergency, borrowers must apply to the credit institution. And
how to do it when banks are closed, is unclear.
However, in order there is a clause that the borrower can apply through email online system “client-Bank”, Internet resource, mobile application or other means of communication. Formally does not require the signing of additional agreements to the contracts of Bank loan. It is also unclear, as in private banks will be able to obtain preferential loans to SMEs and individual entrepreneurs under the new state program to support the amount of 600 billion tenge. Limit per borrower under this program installed for SMEs 3 billion tenge, individual entrepreneurs – not more than 50 million tenge. And there’s without a contract of loan, of course, can not do.