ACRA Financial Stress Index (ACRA FSI KZ)

The Index assesses the proximity of Kazakhstan’s financial system to a state of crisis.
ACRA SFSI methodology is based on calculating structural imbalances in the financial system (the direct method).

The Index calculation principles

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Related research reports

TitleDate

Financial stability in Kazakhstan has reached its pre-crisis level
Structural Financial Stress Index for Kazakhstan21.08.2018

Higher share of short-term borrowings has not increased financial instability in Kazakhstan
Structural Financial Stress Index for Kazakhstan19.03.2018

Kazakhstan’s financial system is becoming more stable but imbalances remain
Structural Financial Stress Index for Kazakhstan 20.12.2017

Comments

In early 2018, the Structural Financial Stress Index for Kazakhstan (ACRA SFSI KZ) continued sliding and reached 0.52 pts by the end of 1Q2018, which is much lower than the previous values of ACRA SFSI KZ. It indicates a growth of stability in the national financial system. The index is very close to its pre-crisis level: in 2010–2013, its value was equal to zero. In this period, the interest rate spread and the foreign exchange rate were the lowest. In 2H2018, the potential risks for the Kazakhstan's financial system may be caused by the growing demand for foreign currency, driven by seasonality and expectedly weaker tenge in case of growing exchange rate for base currencies.

21.08.2018

As at end-2017, Structural Financial Stress Index for Kazakhstan (ACRA SFSI KZ) continued sliding and now stands at 8% of its maximum registered level. Absence of trigger events and a more significant decline of the FX imbalance amid increasing liquidity imbalance strengthened financial stability. One of the potential risks that Kazakhstan’s financial system may face stems from the ongoing decline of real income of the population and lower revenues in the non-financial sector. The real disposable income of the population declined by 0.5% in Q3 2017 year-on-year. Declining incomes raise the likelihood of a higher share of overdue loans forcing financial institutions to follow a less balanced policy in terms of interest and FX risks they take.

19.03.2018

By virtue of no new trigger events as of December 2017, the financial system of Kazakhstan is in a relatively stable mode: ACRA SFSI KZ is now at 15% of its maximum registered levels. However, it is worth noting that the situation may change rapidly due to the relatively high remaining liquidity and FX imbalances. As of December 2017, the slowly declining FX imbalance in the banking sector is, in ACRA’s opinion, the key structural issue for Kazakhstan’s financial system. Amid free-floating exchange rate, this factor may become the source of a systemic risk.

20.12.2017

Contacts

Natalia Porokhova
Senior Director, Head of Sovereign Ratings and Forecasting Group
+7 (495) 139 04 90
natalia.porokhova@acra-ratings.ru

ACRA Financial Stress Index (ACRA FSI KZ)

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