We will not let Kazakhstan-based banks fail: President Nazarbayev

Kazakhstan’s President Nursultan Nazarbayev reiterated that the country’s banking system is stable and urged people not to fall victims to misleading information campaigns, tengrinews reports citing his official website.

“The country’s economy is healthy; nothing disastrous has happened. Not a single bank is going to be bankrupt. We didn’t let banks collapse back in 2009, I mean BTA and some other banks. We made sure citizens’ deposits are safe. We will not that happen now. We guarantee safety of deposits of most of population”, he said when speaking at the sitting on incentives for entrepreneurs and the overall financial sector.

He elaborated that the initiators of the misleading information campaign resulting in deposit runs in some banks in the wake of the 20% currency devaluation would be kept liable. 

“All those contributing to the agitation around banks have been found and will be brought to justice. We want peace and stability for the nation (…) these are values we have been always pursuing”, he emphasized.

“External sources of finance are hardly accessible and foreign credits are expensive. Internal resources for the banking system to rely on are limited as the banks are only exiting the global financial crisis. A decision has been made to allocate $5.4 billion of the National Oil Fund [accumulating windfall oil revenues] to support small and middle-sized businesses, industrialization efforts and infrastructure projects. These projects create jobs and put in place opportunities to enhance the level of life”, he said.

He reminded that the National Fund had already played a crucial role to support the national economy against the backdrop of the global financial crisis. 

“The country’s economy was bailed out; unlike many parts of the world, we prevented cutting down retirement allowances and salaries. Some European nations are still experiencing the repercussions and keep on reducing salaries, retirement allowances, and taking other austerity measures. Today’s decision once again confirms the establishment of the National Fund was a right step for Kazakhstan. The nation should have some reserves for a rainy day that may arise given that the global financial crisis is not yet over”, he said.

February 14 Kazakhstan’s President Nursultan Nazarbayev instructed his Cabinet to allocate $5.4 billion out of the National Oil Fund [accumulating oil windfall revenues] in 2014-2015 as “long money” for the country’s economy. According to Nazarbayev, the funds should be channeled to provide loans to small and middle-sized businesses in processing industries as well as to industrialization projects.

Assets of the National Oil Fund will exceed $122 billion by 2016, Newskaz.ru reported, citing the country’s Minister of Economic Affairs and Budget Planning Erbolat Dossayev as saying on the sidelines of a government sitting August 28, 2013.

“With the oil revenues at the planned level, the assets of the National Oil Fund will rise from $93.9 billion in 2014 to $122.1 billion in 2016”, the Minister said when presenting the 2014-2016 draft country’s budget at that time.

As of August 1, 2013 the assets of the National Oil Fund stood at $64.343 billion (11.39% up against the start of the year).

The National Fund of Kazakhstan was created in 2000 as a stabilization fund that accumulates windfall revenues from oil sales and ensures the economy of Kazakhstan will be stable against the price swings of oil. The assets of the National Fund assets are monitored by the National Bank of the Republic of Kazakhstan.Use of the Tengrinews English materials must be accompanied by a hyperlink to en.Tengrinews.kz