Kazakhs buying up dollars amid vacation season
ASTANA. KAZINFORM In May 2017, the people living in Kazakhstan have greatly boosted the purchases of US dollar cash in exchange offices in the lead-up to the holiday season. Over the last month, the offices have sold $828.1 million, or 47.2 percent more than in April this year, according to ranking.kz.
The May sharp increase in currency purchase is attributable to a seasonal factor, while the KZT/USD exchange rate remained at comfortable levels, having firmed by 1pct in May.
This year May amount is nearly 2 times higher than in May last year. However, in 2016, in the economy, and the market in particular, there were pessimistic sentiments that did not helped to replenish foreign exchange reserves.
The demand for the currency as a reserve asset is on the rise as the population have bought about $3.5 billion in the country's exchange offices over 5 months of this year. This is 13.2pct more than the amount in the same period of the last year. Despite the growth, buying up cash dollars in exchange offices is quite slow as compared to the levels in 2014 and 2015. The devaluation expectations of the population continue to be low.
Recall that between January and May last year, Kazakhstanis bought slightly over $3 billion - the record low for the last 10 years.
This year, only 6 of 16 regions of Kazakhstan have observed increased purchases of US dollars in exchange offices by the population. In January-May 2017, most considerably the demand for cash in the foreign currency has grown in Mangystau region, i.e. the purchase intensity has increased by 54.3 percent, or $65.5 million. The second place is South Kazakhstan region: for 5 months of this year the people have bought USD 42.1pct more than the same period last year. Almaty City is the third as the volume of the currency purchases by the population in offices over the year has increased by 27.4pct, or $356.2 million.