Kazakhstan's central bank moved to reassure investors on Tuesday that the worst impact of the global credit crunch was behind the country, saying domestic banks had enough liquidity and inflation was under control. Kazakhstan-watchers have been concerned with the state of Central Asia's biggest economy after a global credit squeeze hit domestic banks hard in mid-2007 and crippled its highly leveraged construction industry.
Central bank chairman Anvar Saidenov sought to ease these worries, saying banks have weathered the credit crunch in good shape and inflation would be tamed. "Our banks have no problems with liquidity," he told a news conference. "The main impact was last year. There are no surprises at the moment."
Another worry for macroeconomic decision makers is high inflation in the resource-rich nation which relies heavily on oil, metals and grain for export revenues. Saidenov said he was still hopeful that inflation would be in line with the official forecast of below 10 percent. "The forecast that we gave, 10 percent, may still be reached," he said. Inflation was 10.8 percent in 2007. Saidenov said the bank would review its key refinancing rate as soon as next week after cutting it in June and easing reserve requirements for banks to foster economic growth.
"We will decide on the refinancing rate next week. At this stage I cannot say what is likely to be decided," he said. Saidenov said he expected little change in terms of domestic bank assets this year, adding that he hoped that earnings would stay in positive territory.
"If on the whole, we get a small rise in assets in the banking system this year, that would be quite normal," he said. BTA, Kazakhstan's biggest bank, said separately on Tuesday it expected 2008 earnings in line with those of last year but saw a 20 percent growth in assets. Kazakhstan's Halyk, the country's third largest bank, said it expected net revenue to slip 28 percent in 2008. Its total assets rose 7.1 percent by the end of the first half of this year from end-2007.
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