Macro and Politics

* The CBT will release weekly portfolio flows and money & banking statistics for the period of May 15 – 22 at 14:30 local time today. Under normal circumstances, these data would have been published last Thursday; however, the release was postponed to today due to the Eid holiday. The CBT’s reserve statistics for the same week have already been released. Accordingly, during the week of May 15 – 22, the CBT’s gross FX reserves declined by USD8.4bn to USD160.3bn, while net FX reserves fell by USD5.1bn to USD46.9bn. To briefly recall the previous week’s data: Foreign investors recorded net outflows of USD284.6mn from the equity market during the week of May 8 – 15, while the bond market (excluding repo transactions) witnessed a modest net foreign inflow of USD1.3mn. Meanwhile, foreigners’ share in the total government bond stock declined from 5.9% to 5.8% over the same period. In the week of May 8 – 15, residents’ FX deposits (excluding gold, EUR/USD parity effect adjusted) increased by USD672mn, while their total FX deposits (including gold, price-adjusted) posted a net increase of USD476mn. Over the same period, the CBT’s gross FX reserves retreated by USD3bn to USD168.7bn, while net FX reserves fell by USD2.9bn to USD52.1bn. The net reserves excluding swaps also declined by USD2bn, reaching USD37.1bn. Weekly portfolio flows, money & banking statistics and the CBT reserves data for the shortened May 22 – 26 period will be released tomorrow. We expect the upcoming data to indicate that the decline in the CBT’s reserves continued, albeit at a slower pace. Based on our calculations derived from the CBT’s analytical balance sheet, we estimate that during the May 22 – 26 period, gross FX reserves declined by a further USD1.4bn to USD158.9bn, while net FX reserves fell by USD1.7bn to USD45.2bn.