Macro and Politics

* The CBT will release weekly foreign portfolio flows, money & banking statistics, and international reserves for the June 12 – 19 period at 14:30 local time today. Based on our calculations derived from the CBT’s analytical balance sheet, we estimate that during the June 12 – 19 period, gross FX reserves rose by US$5bn to US$157.1bn, while net FX reserves increased by US$6.8bn to US$51.8bn. We expect today’s official reserve data to confirm a reserve accumulation broadly in line with our estimates. To briefly recall the previous week’s data: Following the record-high USD856.9mn foreign equity outflow recorded in the previous week, foreign selling pressure moderated significantly during the June 5 – 12 period with net equity sales easing to USD117.8mn, while the bond market excluding repo transactions registered a net foreign inflow of USD428.8mn. During the same period, residents’ FX deposits (excluding gold and adjusted for EUR/USD parity effect) posted a modest increase of USD197mn, while their total FX deposits (including gold, adjusted for price effect), increased by a mere USD266mn during the June 5 – 12 period. According to the CBT’s official reserve data, gross FX reserves declined sharply by USD7.4bn to USD152.1bn during the June 5 – 12 week, while net FX reserves fell by USD1.8bn to USD45.0bn. Over the same period, the swap stock decreased by USD1.4bn to USD16.0bn, while net reserves excluding swaps deteriorated by USD344mn, falling to USD29.0bn.