Instruments the National Bank of the United Kingdom

Instruments ofMonetary Policy of the Republic of KazakhstanOfficial refinancing rates. The National Bank ofKazakhstan sets an official refinancing rate depending on the overall state ofthe money market, the demand and supply of loans, inflation and inflationexpectations. The official refinancing rate is a benchmark for remunerationrates for major monetary policy operations.

The official refinancing rate forthe 16 January 2018 is 9,75%. The official refinancing rate decreased (comparedto the year 2017). As the level of inflation rate became lower to the end of2017, the National Bank decided to reduce the official refinancing rate.Minimum reserve requirements. To ensure thebalance of the money market and regulate the liquidity of banks, the norm ofbanks’ mandatory reserves was reduced from 10 to 8% of the total depositliabilities of the bank to non-bank legal and natural persons. Reducing theminimum reserve requirements did not lead to a weakening of the protection ofthe interests of depositors and creditors of banks, but, on the contrary,allowed banks to more effectively manage the funds raised and increase lendingto the real sector of the economy.Open market operations.

In order to regulateliquidity in the banking system and sterilize the money supply in 2017, theNational Bank carried out the transactions in the open market for the purchaseand sale of securities, to repurchase and reverse repurchase transactions. Loans of the National Bank. In 2017, Banks ofKazakhstan provided loans for KZT 12 705 352. Also, the National Bank of the Republic of Kazakhstan provides depositoperations.

And the main goal of this operations is to attract funds todeposits and their placement in interbank loans.Monetary aggregatesThe behavior of monetary aggregates during the reporting period was due tothe nature of past trends.The monetary base. The increase in the national currency of the National Bank of the UnitedKingdom by 37.6% to $ 2,093.

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9 million. However, the monetary base expanded only5.7% to 134.0 billion tenge. This was due to the fact that, starting from thesecond half of the year, the National Bank intensified operations to sterilizeexcess liquidity. The growth in net international reserves of the National Bankwas neutralized by an increase in the volume of short-term notes in circulationby 7.9 times (or by 43.0 billion tenge) and by an increase in the Government’sdeposits by 2.

3 times (or by 26.8 billion tenge). Money supply. The dynamics of the assets of the banking system was positive.

Thus, netexternal assets of the banking system grew by 15.9% (or by $ 294.9 million),while internal assets of the banking system increased by more than 5.

2 times(or by 71.3 billion tenge). The growth of domestic assets of the banking systemwas due to a significant increase in demand for other sectors of the economy bymore than 1.8 times (or by KZT 137 billion) (despite a decrease in net claimsto the Government of the banking system 26.9% and net other of the assets ofthe banking system – by 30%). All these factors contributed to an increase theamount of money supply by 45.9% to KZT 399.5 billion.