Published
10/08/2024, 13:17Foreign depositors are trusting the banking system of Kyrgyzstan more and more, increasing the volume of their deposits every month. For instance, they deposited 77% more in domestic banks in 2024 than in 2023. Moreover, both deposits in USD and KGS (22% over the year) are growing.
At the end of August this year, the deposit portfolio of Kyrgyz banks reached 528 billion 557 million KGS. By August 2023, it grew by 33.72%. At that, the growth was ensured both by Kyrgyz citizens‘ and foreigners’ deposits. It is worth noting deposits of the latter have increased more, +28.32%, while our citizens' deposits grew by 24.25%.
In the last month available in the National Bank's report, namely in August 2024, the total volume of new deposits in the Kyrgyz banks totalled 443.5 billion KGS. Of this amount, 357.3 billion were allocated in the national currency, while 86.2 billion fell on foreign currency deposits.
By the way, the total volume of new deposits has significantly increased this year. In July, total deposits reached 461bn 533m KGS - 86.9% more than in July 2023 (246 bn 948 m). August also saw a 35.2% growth from 328.98 billion KGS last year.
In July 2024, foreigners deposited 57 billion 986 million KGS in the Kyrgyz banks. This is 77.5% more than in July 2023 (32.7 billion KGS). In August the amount was slightly lower than in July - 49 billion 990 million KGS. It is also lower than in August last year when foreigners deposited a record 92.6 billion KGS in accounts in our banks ( after that they deposited in commercial banks between 45-50 billion monthly).
"Akchabar ’ earlier wrote about the record deposit of non-residents in domestic banks. At that time, experts attributed it to the fact that many relocants had decided to stay in Kyrgyzstan.
If in August 2023, foreigners deposited a total of 5 billion 674.7 million KGS on deposits in KGS, in August this year - 7 billion 344.2 million, that is by 29.42% more. As a result, at the end of the last summer month, 7 billion 538.5 million KGS were kept in deposits in the national currency in commercial banks. This is a record amount deposited in our banks for more than a month.
Let's note that even though our banks in the EAEU offer competitive interest rates on deposits, only 47% of this amount, or 3 billion 528 million KGS, was placed on time deposits. The remaining amount - 2.4 billion KGS - was allocated to demand accounts and another 1.6 billion was deposited on current accounts.
As to time deposits, deposits from one to three years are popular among non-residents, in which they keep 1.2 billion KGS at an average rate of 14.18%. The second place is taken by deposits from 6 to 12 months, where they accumulate 983.8 million KGS at 13.3%, and the third place goes to deposits from one to three months (where they keep 587.9 million KGS at an average rate of 11.95%).
Besides, foreigners deposit significant amounts on demand accounts every month. For example, in August this year, they deposited 7.3 billion KGS. However, most of these funds were withdrawn before the end of the month, so these funds were not included in the deposit statistics at the end of August.
In July last year, foreigners deposited 27.3 billion KGS in foreign currency, of which 25.3 billion KGS could be withdrawn at any time.
In August 2023, these amounts sharply increased to 86.9 billion KGS, and almost all of them - 86.3 billion - were in demand accounts again. But in 2024, the situation returned to normal after the record, and the amounts began to decrease: in July, the volume of such deposits amounted to 50.3 billion KGS, and in August, deposits decreased to 42.6 billion.
Ed. note: the material compares July to July and August to August to demonstrate a more complete picture, as the abnormal growth of deposits in August 2023 will not allow us to reflect the whole picture.
Of note, there is no cumulative interest on demand deposits. This suggests that most foreigners are not aiming at their money increasing, but to keep their own.
