On 11 February 2014 the National Bank of Kazakhstan (Қазақстан Республикасы Ұлттық Банкінің) published an untitled press release – issued only in Kazakh and Russian, not in English – to announce that it would be reducing its target exchange rate for the Kazakh tenge (KZT) from 155.50 per USD to 184.50 per USD. The nondescript 3-page announcement effectively devalued the nation’s currency by 19% overnight, wiping out 19% of the monetary value of any savings and pension deposits made in tenge rather than foreign currencies.
The move sparked protests in Astana, Almaty, and
elsewhere. In addition, within hours
rumors began circulating on social networks and via SMS and WhatsApp that
several banks were on the verge of failure, especially the mid-sized banks Bank
CenterCredit («Банк ЦентрКредит » АҚ), Alliance Bank («Альянс Банк»
АҚ), and Kaspi Bank («Kaspi Bank» АҚ). These and other banks were soon inundated
with panicked depositors seeking to withdraw their funds, but none of the banks
encountered any serious difficulties.
On 11 February the CEO of Bank CenterCredit published
a press release denying that the devaluation would have any negative impact on
the bank, and noting that among the bank’s shareholders are Korea’s KB Kookmin
Bank (KB국민은행), which has more than USD 250 billion in total
assets, and International Finance Corporation, a member of the World Bank
Group.
On 18 February the three banks Bank CenterCredit,
Alliance Bank, and Kaspi Bank issued a joint press release, noting that since
the devaluation SMS and WhatsApp messages had been sent to a large number of
people, particularly in Almaty and Astana, claiming that the three banks were
on the verge of bankruptcy and having their licenses revoked. The press release included images of two
offending SMSs, and called on law enforcement authorities to catch and
prosecute those guilty of the attacks.
Also on 18 February, the CEO of one of the banks
affected, Kaspi Bank, announced a reward of KZT 100 million (USD 540,000) for
information leading to the identification of the person sending the SMSs. (But at least one legal expert was quoted as
saying that even if the banks did succeed in finding any of the perpetrators,
it would be difficult to prosecute them.) The bank also announced that it would be raising
the salaries of its employees by 10% to compensate in part for the devaluation.
On 25 February, the consumer-rights organization KazPotrebNadzor
suggested that one trillion tenge (USD 5.4 bln) from the nation’s
sovereign wealth fund, the Samruk-Kazyna National Welfare Fund («Самұрық-Қазына»
Ұлттық әл-ауқат қоры» АҚ), be used to
compensate low-income Kazakh citizens who suffered from the devaluation. The organization suggested that the monies be
used 1) to reimburse the losses of pension depositors in the United National
Pension Fund («Бірыңғай жинақтаушы зейнетақы қорын» АҚ) whose pension
deposits did not exceed KZT 3 mln at the time of the devaluation, 2) to
reimburse 50% of the losses of holders of KZT-denominated bank accounts not
exceeding KZT 3 mln at the time of the devaluation, and 3) in subsidies for
utility payments for able-bodied citizens who do not have a regular income.
Sources:
National
Bank of Kazakhstan press release – Russian version: ПРЕСС-РЕЛИЗ № 5
(2014-02-11 11:22:17)
Bank
CenterCredit press release: Председатель правления
Банка ЦентрКредит Владислав Ли: «Влияние девальвации на текущую деятельность
БЦК будет минимальным…» (2014-02-11 21:07:30)
Слухи
о банкротстве "Банка ЦентрКредит" опровергли (2014-02-12 04:26)
Euronews
video: Protesters
arrested in Kazakhstan after demonstration against currency devaluation
(2014-02-16)
Joint press
release by 3 banks: kaspi bank, Банк
Центр Кредит и Альянс банк обратились в правоохранительные органы в связи с
информационной атакой (2014-02-18 15:31:16)
100
миллионов тенге заплатит Kaspi bank за информацию об SMS-террористе (2014-02-18
15:10)
Three
large-scaled banks claim there is an information campaign against them
(2014-02-18 16:38)
Казпотребнадзор: Для населения необходимо
выделить дополнительный триллион тенге из Нацфонда (2014-02-25)
On 26 February the International Monetary Fund
published a country report for Macedonia.
Among other items, the report noted that a slight reduction in policy
interest rates decided upon by the National Bank of the Republic of Macedonia (Народна
банка на Република Македонија) on 9 July 2013 had not resulted in the
hoped-for increase in lending, “partly due to risk aversion, partly to
portfolio cleansing”:
RECENT
ECONOMIC DEVELOPMENTS
[...]
5.
Further monetary easing has been unable to revive credit growth. In
the face of a deceleration in credit growth to about 3.1 percent in the first
half of the year, in July the authorities reduced the central bank bill rate
(the main policy instrument) and the 7-day deposit facility rate by 25 basis
points, to 3.25 percent and 1.50 percent, respectively. At the same time, they
lowered reserve requirements on liabilities in domestic currency, tightening
them on short-term FX deposits, with the dual objectives of stimulating deposit
growth in local currency and encouraging long-term foreign capital funding of
domestic banks. Yet credit growth has remained subdued so far, especially to
the corporate sector—partly due to risk aversion, partly to portfolio cleaning.
[...]
Sources:
IMF: Country
Report No. 14/62: Yugoslav Republic of Macedonia: Second Post-Program
Monitoring Discussions (2014-02-26)
National
Bank of the Republic of Macedonia rate decision: Соопштение
на НБРМ (2013-07-10)
In interest-rate news, on 27 February 2014 the
Shanghai office of the People’s Bank of China (PBC) announced that as a first
step toward complete marketization of interest rates on foreign-currency
deposits nationwide, beginning on 1 March the nationally-mandated ceilings on
interest rates on “small” foreign-currency deposits would be eliminated within
the Shanghai Free Trade Zone.
A PBC directive of 25 August 2000 defined “small” (小额) foreign-currency deposits as deposits of less than USD
3 million or equivalent.
The Shanghai Free Trade Zone – formally known as the
“China (Shanghai) Pilot Free Trade Zone” (中国（上海）自由贸易试验区) – was officially opened on 29 September 2013.
Sources:
Removal of
interest-rate ceiling on “small” foreign-currency deposits: 上海自贸区放开小额外币存款利率上限 (2014-02-27
00:07:00)
PBC
directive defining threshold for large and small foreign-currency deposits: 2000年14期 关于改革外币存贷款利率管理体制的通知 – 银发[2000]267号
(2000-08-25)
Homepage of
China (Shanghai) Pilot Free Trade Zone: 中国（上海）自由贸易试验区门户网站
Also in China, on 18 February the commercial bank Bank
of China (中国银行, not to be confused with the nation’s central bank,
the People’s Bank of China) issued a quarterly update to its Cross-Border
RMB Index (CRI). The index, which was
launched on 20 September 2013, aims to be a comprehensive measure of the use of
RMB (renminbi 人民币 – CNY) “for
cross-border and offshore transactions by both domestic and overseas clients.”
With the end of 2011 being set as 100, the index at
the end of 2013 reached a level of 228, an increase of 128% over two years and
of 56% in 2013 alone, indicating rapid growth in the use of CNY not only in
Chinese imports and exports, but also between parties located outside China. The bank’s press release noted as well that the
increased use of CNY internationally is also revealed by data from BIS and
SWIFT: “According to the market survey result released by the Bank for
International Settlements, RMB has become the ninth biggest foreign exchange currency.
The data disclosed by SWIFT also shows that RMB has become the eighth biggest
currency for international settlement.”
Although the mechanics behind the calculation of each
quarter’s result have not been published, in its initial press release on 20 September
2013 the bank offered the following explanation of how the new index would work (emphasis added):
Characteristics of the
Index:
Unique perspective. The market generally creates indices from the
perspective of currency functions, while CRI creates indices from the perspective of currency
circulation process, so as to reveal the dynamic circulation and
utilization of RMB from a different perspective.
Well-knit framework. The index is composed of three well-knit parts
including cross-border
outflow, overseas
circulation and cross-border
inflow of RMB, which are all reflected by the flow indicators so that
the index framework is logically consistent.
Full coverage. The index with wide coverage, covers all items under current account and typical
items under capital account, reflecting RMB circulation and utilization
abroad by clearing status, which comprehensively reveals the degree of activity
of cross-border and overseas RMB circulation and utilization.
Clear guideline. Changes in cross-border RMB index can be divided by
various composition indicators of cross-border outflow, circulation and inflow
for better understanding of the influences of changes in RMB utilization in
commodity trade, service trade, direct investment, overseas clearing and other items
on index performance, providing a clear guideline for improving cross-border
RMB utilization.
Sources:
Bank of
China press release – Chinese: 中国银行跨境人民币指数（CRI）创新高：去年中行跨境人民币结算3.98万亿元同比增六成 (2014-02-18)
Bank of
China press release – English: Bank of
China Cross-border RMB Index Reached New High: BOC Records RMB3.98 Trillion in
Cross-border RMB Settlements Last Year, Up 60% YOY (2014-02-19)
Launching of
index – Chinese: 中国银行有关负责人就跨境人民币指数答记者问
(2013-09-20)
Launching of
index – English: Bank
of China Officially Launches Cross-Border RMB Index (2013-09-20)
Finally, on 14 February the Central Bank of the
Republic of China (Taiwan) published statistics for RMB (CNY) deposits in
Taiwan as of the end of January 2014.
The figures reveal that at the end of January total CNY-denominated
deposits in Taiwan had reached CNY 214.522 billion (USD 35.4 bln).
Deposits in CNY only became possible in Taiwan one
year earlier, on 6 February 2013, and within one day a total of CNY 1.3 bln of
deposits were created. The strong
interest in CNY-denominated deposits in Taiwan is thought to be due to the
higher interest rates offered by Taiwanese for CNY deposits than for Taiwan
dollar (TWD) deposits.
Sources:
Central Bank
of Republic of China (Taiwan) press release on stats for January 2014: 新聞發布第035號(103年1月銀行辦理人民幣業務概況) (2014-02-14)
Taiwanese
news article: 至1月底 人民幣存款2145.22億
(2014-02-14 16:45)
Mainland
Chinese news article: 台湾岛内人民币存款折合新台币逾兆 开办仅1年 (2014-02-15 10:28:00)
Central Bank
of Republic of China (Taiwan) press release on beginning of CNY accounts: 新聞發布第035號(人民幣業務及外幣結算平台之相關進展)
(2013-02-07)
