Analysis of a current state.

The modern banking system of Kazakhstan developed as a result of the various transformations given in a framework of bank reform which is led in our republic since 1987.

The transition period during which old and new bank structures coexisted, appeared rather short. As a result in the Republic there was the two-level banking system which first level represents National bank, and the second or bottom level is represented by the state, commercial, joint and foreign banks. The national bank is the main bank of Kazakhstan and is in its property. On the one hand, he is the legal entity who is carrying out certain civil-law transactions with commercial by banks and the state. On the other hand, it is allocated with large imperious powers on management of a monetary and credit system of the republic which are fixed in the Law «About the RK National bank». The main objective of NBK is ensuring internal and external stability of national currency of the Republic of Kazakhstan, and also development and carrying out a monetary policy, regulation of monetary circulation, the organization of bank calculations and the currency relations, assistance to ensuring stability of a monetary, credit and banking system, protection of interests of creditors and investors of bank. NBK also acts as the issuer of the state securities, participates in service of an internal and external debt of RK which guarantor is RK Government; the National bank carries out supervision of activity of commercial banks and the organizations which are carrying out operations on a purchase, sale and an exchange of foreign currency and establishes the prudentsialny standards regulating activity of banks. That is the National bank bears full responsibility for functioning of the monetary and credit sphere and represents interests of RK in the relations with the central banks and financial credit institutions of other countries.

Policy of national bank of Kazakhstan.

Reforming of a banking system of Kazakhstan passed practically in three stages.

At the first stage (1988-1991) in a condition of existence of the USSR reorganization of the state branch specialized banks by transfer of a part of functions of the center republican divisions of the relevant banks was carried out, creation of the first commercial banks is begun and initial steps according to the legend to the State Bank of separate functions of the central bank are taken.

The second stage since (1992-1993) is characterized by gradual transition of National Bank to performance of a number of functions of the central bank within existence of a rouble zone, extensive formation and development of commercial banks, the beginning of formation of national bank standard and legal base.

At the third stage (since November 1993) in connection with introduction of national currency full responsibility for functioning of the monetary and credit sphere, introduction of classical principles of its relationship was assigned to National bank with the budget and banks, strengthening of system of regulation of activity of banks.

Follows that at the beginning of the third stage the condition of a banking system of the country in essence didn't answer fully objective to requirements shown to them. It belonged as to National bank which had by then no traditions and experience in a part of performance of functions of the central bank, and to banks of the second level which weren't capable in necessary volumes to carry out economy crediting at the expense of own and independently mobilized financial resources and to carry out all complex of bank services.

In these conditions the National bank developed and approved by the president of the republic the specific program of reforming of a banking system in Kazakhstan for 1995. The program was coordinated with actions of the government for deepening of reforms and an exit from an economic crisis, and also considered recommendations of the international financial organizations. During implementation of this program certain positive results were received:

* necessary coordination of activity of National bank of the Ministry of Finance in carrying out financial policy of the state is reached;

* introduction of all range of instruments of monetary and credit and currency regulation, characteristic for classical central banks is complete;

* the following mechanisms of system of supervision and regulation of activity of banks of the second level are developed;

* the regulatory base is created processing of system of currency regulation and control is begun;

* measures for increase of level and efficiency of the analysis of macroeconomic processes, their forecasting and decision-making use are taken;

* considerable work on achievement of adequacy of used system of accounting of National bank and bank of the second level international by standards to requirements of market economy is carried out;

* it was reduced number of the banks which are directly breaking established economic standards and the rights of the enterprises and individuals - clients of banks;

* quality of mechanisms of accumulation by banks of the second level of financial resources, and also level of an assessment of projects raised when crediting managing subjects and degree of risk of recoverability of the credits;

* positive tendencies were outlined in increase of level of capitalization of the banks, allowing them independently to carry out financing of large projects on a medium-term and long-term basis;

* work on increase of vocational training of the personnel is intensified.

Carrying out consecutive and interrelated steps on reforming and development of a banking system of the country, and also implementation of a moderate and rigid monetary policy allowed to bridle inflation, to stabilize a rate of tenge and to lower level of interest rates.

Annual rates of inflation decreased in 1995 to 160,3 % against 1258 % in 1994. The rate of tenge in relation to US dollar for 1994 was devaluated in 8,6 times, and in 1995 only for 18 %. The rate of refinancing of National bank decreased from 300 % in 1994 to 45 % in September, 1995 and, in connection with inflation growth owing to influence not monetary factors in the fourth quarter 1995г., it is raised now to 59 %.

Carried-out National bank of a measure positively affected results of the financial and macroeconomic stabilization reached against rather difficult and inconsistent situation at micro level.

Main objective carried-out National bank of a monetary policy is maintenance of stability of national currency, increase of liquidity of a banking system and providing adequate conditions for market development. In a banking system of the Republic of Kazakhstan the major role in achievement of macroeconomic stabilization belongs, to creation of conditions for implementation of system transformations and formation on this basis of preconditions for overcoming of decline in production and the subsequent growth of investments and productions.

The national bank of the Republic of Kazakhstan uses classical monetary and credit tools: regulations of volume of the credits provided by bank when financing definition of an official rate of refinancing of establishment of norm of obligatory reserves, carrying out interventions in the currency market and operations both with the state securities and with securities of National bank.

Volumes of the provided credits of refinancing and terms on which they are provided are reduced about three months as they should help to banks to solve short-term problems of liquidity. From last year actively function the interbank credit market created on the basis of the Kazakhstan central clearing payment. In the carried-out auction in the interbank market participate national bank for maintenance of liquidity and acceptable level of interest rates. Since 1995 the system of the pawn credit at which the credits are provided to banks on the security of the state securities is entered. The credits of the Ministry of Finance for a covering of a budget deficit are provided in volumes approved by the Law «About the republican budget». The rate of refinancing of National bank is constantly supported positive in real expression and fully is parameter of regulation of demand for money.

Other important task of National bank is rate maintenance at such level that level of depositary rates formed with its account in the market was slightly higher, than level of rates on currency deposits for the purpose of impact on degree of a dollar of economy. The steady tendency of growth of deposits of the population and increase in growth of a share of deposits of the population in the general monetary weight is observed that, in turn, allows to increase resources of banks, and also possibilities of crediting of the enterprises at micro level. This positive tendency can will become stronger further under an indispensable condition competition development between banks and improvements of appeal of deposits, expansion of types and quality of bank services.

On a row with a moderate and rigid anti-inflationary policy of the government and National bank delay of rates of structural and institutional transformations at a microeconomic level that is the main source of high inflation negatively affected. Decrease in rates of decline in production led to some increase in demand for money from managing subjects. In the current year the main strategy of monetary and credit regulation is maintenance of the reached macroeconomic stabilization, ensuring transition to the purpose of economic growth and maintenance of viability of new economic subjects. There are two main conditions / First regulation of economic subjects from banks of the second level at the expense of accruing inflow of money to these banks on deposits and deposits., Secondly, growth of the cumulative offer of money, reasonably, from National bank and all banking system.

Development of the monetary and credit sphere according to forecasts of National bank assumes that decrease in inflation, interest rates and inflationary expectations, and also further strengthening of national currency will cause delay of speed of the address of money. Decrease in speed of the address in a condition of stabilization of volume of production will lead to further increase in demand for money. Expansion of monetary weight is provided in the optimum sizes as along with need and to a maturing of conditions for expansion of money should will remain the restrictive principles of monetary policy caused by the purpose of decrease in inflation. Multiplicate influence from banks of the second level becomes the main channel of expansion of money. Taking into account increase of banks of the second level in the market of drags of metals and the currency market as a whole on a banking system external assets will increase.

The main instruments of regulation of demand for money will be: a rate of refinancing of National bank, the pawn credits, repo operations in all markets (, gold and exchange and securities), and also notes of the National bank which issue will be reduced оп to a measure of expansion of securities market. Expansion of a range of exchange transactions in less risky markets will allow to increase liquidity of banks.

Norms of obligatory reservation of money on correspondent accounts of bank of the second level serve increase of liquidity of banks, and also, as the monetary policy tool, are a regulator of demand for money. In the conditions of the stable development which have outlined recently of the market of the state securities with a steady tendency of decrease in their profitability preconditions for its expansion not only on means of building of volumes of issues, but also at the expense of release in the circulation of securities are created. Issue of bills with term of the address is in the long term planned 1 year.

Also expansion of market capacity of the state securities is promoted by attraction of a wide range of potential investors, including not residents of RK.

The national bank intends to go by the way of the world development of the market of the state securities. In process of deepening of primary market will be volumes of operations in the open market, including sale of exchequer securities with longer maturity dates will extend, and the main weight of a monetary policy will be assigned to them, having in view of in 1997 the complete termination of crediting at the expense of resources of National bank of deficiency of the state budget.

In the conditions of still insufficient development of securities market of intervention of National bank in the currency market remain one of effective instruments of monetary and credit regulation.

Considering foreign experience, and the main thing - the turned-out personal experience of work in operating conditions of national currency, the National bank intends to continue carrying out policy of the unified exchange rate of the tenge reflecting a ratio of supply and demand in the currency market at limited intervention.

In view of saved-up positive experience of creation of the liquid currency market, National bank will pursue flexible policy in the field of obligatory sale by the revenue enterprises from export in foreign currency.

The currency market will develop in the direction of deepening of the interbank market regarding extension of forward currency transactions and development of instruments of hedging of currency risks. Further the National bank together with commercial banks will start to carry out transition of the interbank currency market to a mode of continuous functioning of the market with unlimited possibility of the conclusion of transactions.

On the basis of the developed concept of management of gold and foreign exchange reserves the National bank will continue formation and support of optimum structure of their structure, proceeding from the current and perspective tasks facing National bank. The considerable attention will be given to improvement of the mechanisms providing a choice of effective means of implementation of the international payments taking into account urgency, the size, appointment and safety of carried-out operations, and also more active and effective use of the international market of short-term deposits and the market of drags of metals.

Today the banking system is in a complete dependence from state of the economy of real economy - for everything low solvency of economic subjects is known, aren't an exception and enterprise structures, there is no essential decrease in non-payments to banks that affects quality of financial mediation and competition development between banks brakes. Therefore for the fastest conclusion of economy from a crisis state it is necessary to liquidate payment crisis first of all.

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