Kazakh Central Bank Buys $375M for Pension Fund in July

In July, the National Bank of Kazakhstan purchased foreign currency worth $375 million for the Unified Accumulative Pension Fund (UAPF), four times more than the $92 million bought in the previous month, reports infohub.kz.

According to the regulator's foreign exchange market review, July purchases accounted for about 4.4% of the total trading volume on the Kazakhstan Stock Exchange (KASE). Future decisions on currency purchases will be made taking into account market conditions and the objectives of managing the fund's pension assets.

In parallel, the National Bank continued operations with the National Fund. In July, sales of foreign currency from the National Fund totaled $200 million, equivalent to 2.3% of the total exchange trading volume. In August, sales from the National Fund are expected to range between $200 million and $300 million.

Additionally, to finance transfers to the republican budget, the regulator purchased $500 million from the National Fund. These funds will be gradually sold on the domestic foreign exchange market until the end of 2026 under the mechanism of mirroring operations with the National Fund.

Earlier, in response to a request from Kursiv, the National Bank explained how the new mirroring of operations with the National Fund would affect the tenge.

Under another type of mirroring – operations with gold – in July the National Bank sterilized about 374 billion tenge (approximately $792.2 million at the average monthly exchange rate). In August, it plans to sell a similar amount of currency for these purposes.

Also in July, quasi-public sector entities sold about $195 million in foreign currency earnings on the market, nearly 2.2 times less than in June. However, it should be recalled that the requirement was in effect only until July 15, after which it was suspended.

The National Bank did not conduct currency interventions in July. On a net basis, the volume of currency entering the market from the National Bank and other market participants amounted to about $812.2 million. This is 35.4%, or $444.4 million, less than the June figure of $1.26 billion.

The tenge strengthened by 1.3% over the month, reaching 473.81 per dollar. The average daily trading volume on KASE in July increased from $369 million to $389 million, with total trading volume reaching $8.6 billion.