At the government session chaired by Prime Minister Askar Mamin, in the course of discussion of the results of the country's socio-economic development and execution of the republican budget for January-November of this year, Chair of the National Bank Erbolat Dossaev presented his report.

In November, the results of the US elections and reports of successful trials of vaccines against coronavirus had a significant impact on the global financial and commodity markets. News of the emergence of effective means of combating Covid-19 brought hope to investors for an early normalization of economic activity. This has been the main driver of growth in equity markets, energy markets and industrial metals.

Most of the major market indicators hit record highs in November. The S&P 500 recovered from the lows after the March drop and recorded all-time highs. The Dow Jones Industrial Average also surpassed the historic 30,000 mark. The post-US presidential certainty and vaccine news have put downward pressure on the US dollar index and the price of gold.

“The Global Composite PMI in November 2020 fell slightly to 53.1 points from 53.3 in October 2020. Against the backdrop of restrictive measures, the business activity index in the EU manufacturing sector in November fell from 54.8 to 53.8, a similar indicator in the services sector fell to 41.7 from 46.9. At the same time, the index of business activity in the Chinese industry for the month increased from 53.6 to 54.9, the USA — from 53.4 to 56.7 points, where quarantine measures were not taken, despite the increase in the incidence of coronavirus," said Dossaev.

In Kazakhstan, the business activity index for November 2020 increased from 48.8 to 49.4, which is largely due to the exit of construction in the positive zone, where the indicator increased by 4.9 points to 52.5. In industry and services, the situation remained practically unchanged, the indices were 49.6 and 48.7, respectively.

In November 2020, annual inflation accelerated to 7.3% compared to 7.1% a month earlier. Food inflation continues to make the largest contribution to the overall rise in prices. The annual growth in food prices increased from 10.7% to 10.8% amid growing imbalances in the markets for selected food products. Non-food inflation accelerated from 5.6% to 5.7% due to accelerated growth in clothing prices to 4.7%. Inflation of paid services accelerated from 3.7% to 4.1% due to the rise in prices for regulated housing and communal services and services in the field of culture and recreation.

Favorable external conditions along with increased domestic supply due to exporters' sales of foreign currency for tax payments in November contributed to the strengthening of the exchange rate by 1.8% from 432.66 to 425.07 tenge per US dollar. Reports of successful trials of several vaccines at once and the beginning of the formal transition of the presidency in the United States increased the demand for risky assets.

The price of oil in November rose by 27% from $37.5 to $47.6 per barrel. In December, oil quotes are steadily increasing after the decision of OPEC+ to increase production at a more gradual pace.

The decline in the US dollar index had a positive effect on the dynamics of the currencies of developing countries. Thus, the Brazilian real strengthened over the month by 6.6%, the Turkish lira — by 6.2%, the South African rand and the Mexican peso — by 4.7%, the Russian ruble — by 3.7%.

“An additional factor in the balance of the foreign exchange market in November this year. there remained the conversion of the assets of the National Fund within the framework of the guaranteed transfer and the obligatory sale of a part of the export foreign exchange earnings by the companies of the quasi-public sector. The exchange rate following the results of trading on the stock exchange on December 9, this year, amounted to 419.92 tenge per US dollar, having strengthened by another 1.2% since the beginning of the month,’’ the head of the National Bank emphasized.

Gold and foreign exchange reserves of the National Bank, according to preliminary data, in November this year decreased by $1.1 billion to $32.5 billion, mainly due to the decline in the price of gold. In December, the price of gold rose from $1,771.95 to $1,859.80 per troy ounce amid progress in agreeing a new stimulus package in the US Senate worth $916 billion and the further spread of the coronavirus around the world. The rise in price partially restored the decline in the gold portfolio in November, which amounted to $23.05 billion as of Dec. 10, which ensured the growth of the portfolio by 4.74% since the beginning of the month.

The assets of the National Fund amounted to $58 billion, having increased by $1.7 billion over the month amid a significant increase in the stock market due to reports on the effectiveness of vaccines against coronavirus and positive quarterly reports of the world's leading companies. The investment income of the National Fund since the beginning of this year amounted to $3 billion or 5.6%.

In aggregate, international reserves, including the assets of the National Fund, at the end of November of this year, according to preliminary data, amounted to $90.5 billion, having increased by $0.6 billion over the month.

“Deposits in the banking system at the end of October this year amounted to 21.9 trillion tenge, having increased by 15.3% since the beginning of the year, largely due to the growth of tenge deposits. Deposits in national currency increased by 20.0% to 13 trillion tenge, foreign currency deposits — by 9.2% tenge, amounting to 9 trillion tenge at the end of October this year. As a result, the level of dollarization of deposits decreased to 40.8% in October of this year. Loans to the economy since the beginning of the year have increased by 4.2% to 14.4 trillion tenge at the end of October of this year. as a result of an increase in long-term loans by 5.2% or 613.4 billion tenge to 12.4 trillion tenge. Short-term loans decreased by 1.8% or 37 billion tenge to 2 trillion tenge,” Dossaev said.

The business loan portfolio since the beginning of the year has increased by 1.1% to 7.3 trillion tenge. The rate on tenge loans to legal entities amounted to 11.8% in October 2020, incl. for short-term loans — 11.6%, for long-term loans — 12.3%. Loans from the population, including individual entrepreneurship, from the beginning of this year increased by 7.5% to 7.2 trillion tenge. In their structure, consumer loans increased by 1.4% to 4.3 trillion tenge, mortgage loans — by 22.6% to 2.2 trillion tenge due to the implementation of state programs.

To support the economy, the implementation of the anti-crisis initiatives of the Head of State continues.

According to the Economy of Simple Things Program, as of Dec. 4, 2020, entrepreneurs received 1,328 applications for 909 billion tenge, of which banks approved 873 applications for a total amount of 645.5 billion tenge, 737 loans were issued for 472.6 billion tenge.

Under the Program of Concessional Lending to Entrepreneurship Entities, as of Dec. 4, 2019, entrepreneurs issued 4,736 loans for 469.5 billion tenge, of which 1,707 loans for 116 billion tenge at the expense of money received from the repayment of previously issued loans.

Support for housing construction continues with funding from the National Bank.

According to the program 7-20-25 on Dec. 3, 2020, 26,359 applications for 309.3 billion tenge were approved, of which 20,975 loans were issued for 244.9 billion tenge.

Under the Baspana Hit market mortgage program, as of Dec. 3, 2020, 48,445 applications were approved for the amount of 431 billion tenge, 39,629 loans were issued for 344.5 billion tenge.

In accordance with the instruction of the Head of State on Nov. 30, 2020, the Board of the National Bank adopted the Program for the Development of the National Payment System of the Republic of Kazakhstan until 2025.

“At the first stage in 2021, the development of an instant payment system and the construction of an interbank payment card system will be carried out. In 2022-2023, the focus will be on connecting new services. Particular attention will be paid to the transition to the format of the international standard for financial messages ISO 20022, the development of a remote identification service, the formulation of requirements for Open API and Open Banking, improvement of the regulatory framework to support innovations in the financial market, issues of harmonization in the EAEU and digital currency,’’ the chair of the National Bank reported.

In 2024-2025, work will continue to develop the national payment infrastructure and new services.

Successful implementation of the measures included in the program will lead to a 2-fold reduction in the costs of non-cash payments, acceleration of payments within the country from 2 days to 1 minute. The use of non-cash payments will expand. Also, the national payment system will eliminate dependence on foreign operators.