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Proportion of US dollar deposits is declining

As of March 1 this year, retail deposits in Kazakhstani banks exceed 20 trillion tenge having increased by 20.7% over the year. Dynamic growth in household deposits is observed from year to year, which indicates the mood of Kazakhstanis for making savings and the growth of financial discipline. Retail deposits in STBs of the Republic of Kazakhstan have increased 2.4 times over five years, and almost 5 times - over a decade, writes Ranking.kz.
Proportion of US dollar deposits is declining

However, the share of foreign-currency deposits is decreasing from year to year; it is an active stage of de-dollarization of investments. Thus, at the end of February 2024, the share of household deposits in foreign currency formed 26.1%, while it was 32.7%a year earlier, 38.7% - in the same period in 2022, 42.4% - in 2020, 50.3% - in 2018, and 78.2% - in the same period of 2016.  

A shrinking share of foreign-currency deposits does not indicate a decrease in the popularity of USD or euro among the population; these are rather the results of de-dollarization of deposits pursued in the financial market. It was in 2016, when the share of deposits in foreign currency began to drop, that interest rates on such deposits began to fall at the legislative level. For many years the rate has not exceeded 1%.

Thus, the reduction in the share of foreign-currency deposits in STBs of the Republic of Kazakhstan is mainly due to forced unfavorable banking conditions. In this regard, USD depositors are looking for other ways to invest funds, since keeping savings, even foreign currency, “under the pillow” is not profitable.

Source: https://ranking.kz/about_project

Photos are from open sources.

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