The National Bank of the Kyrgyz Republic spent over $400 million to keep the dollar at 87.45 KGS

The Kyrgyz currency market is showing stability despite the situation on external markets. At the same time, after selling over $160 million last week, when the National Bank of Kyrgyzstan carried out its largest intervention this year, the dollar exchange rate remained virtually unchanged.

According to interbank trading data, the key event of last week was the intervention on February 26, when the regulator sold $162.55 million. This was the largest intervention this year.

Most of the currency, namely $131.7 million, was sold with settlement on the day of the transaction.

Despite such a significant supply of currency, the exchange rate hardly reacted. Trading on February 26 opened at 87.45 KGS per dollar and closed at the same level. Even on the next trading day after the intervention, the exchange rate only slightly declined at the opening to 87.4499, but by the close it had returned to its previous level of 87.45 KGS.

Moreover, at the beginning of this week, demand for currency on the interbank market rose again. On March 2, the volume of currency purchase and sale transactions amounted to $38.9 million, of which $36.9 million were same-day transactions. For comparison, last week banks bought less than $5 million per day on average, which is eight times less.

At the same time, the dollar exchange rate in the republic remains unchanged. For comparison, from March 3 to March 4 alone, the official US dollar exchange rate in Russia rose by 0.56% to 77.6093 rubles, while in neighboring Kazakhstan, the dollar fell to 498.09, or by 0.9%.

We would like to add that the intervention on February 26 was the regulator's largest operation this year. Earlier, the National Bank had already entered the market on January 19, selling $134.05 million, and on February 6, selling $109.95 million. Thus, in less than two months, the regulator sold $406.55 million on the currency market.

The stability of the exchange rate against the backdrop of significant sales volumes may indicate that the goal of the intervention is to keep the exchange rate within a narrow corridor of about 87.45 KGS per dollar.