Macro and Politics

* The CBT will release weekly foreign portfolio flows, money and banking statistics, and international reserves for the September 25 – October 2 period today at 14:30 local time. Based on our calculations using the CBT’s analytical balance sheet, we estimate that gross reserves declined by USD4.1bn to USD167.1bn, while net reserves increased slightly by USD185mn to USD53.5bn during the week. We expect today’s official data to confirm a change in reserves broadly in line with our analytical balance sheet-based calculations. To recall the previous week’s data: Foreign investors added a net USD358.6mn to their equity holdings in the September 18–25 week, while recording net sales of USD410mn in the bond market, excluding repo transactions. This marked the strongest weekly foreign inflow into equities since the week of June 19, while net foreign selling in the bond market extended into a second week. Foreigners’ share in the total bond stock fell from 6.9% to 6.7%, its lowest level since early July. During the same week, residents’ FX deposits (excluding gold and adjusted for the EUR/USD parity effect) increased by USD1.3bn, while their total FX deposits (including gold, adjusted for the price effect) also rose by USD1.3bn. Moreover, the decline in the CBT’s reserves persisted in the September 18–25 week. Gross reserves decreased by USD3.2bn to USD171.2bn, while net reserves fell by USD2.4bn to USD53.3bn. The swap stock, meanwhile, rose by USD781mn to USD13.5bn, bringing net reserves excluding swaps down by USD3.2bn to USD39.8bn.