Resolution of the Board of the National Bank of the Republic of Kazakhstan No. 34 of July 5, 2024 on Amendments to Regulations on Managing Gold and Foreign Exchange Assets

«REPUBLIC OF KAZAKHSTAN NATIONAL BANK» REPUBLICAN STATE INSTITUTION		REPUBLICAN STATE INSTITUTION "NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN"
RESOLUTION OF THE BOARD July 5, 2024 Astana city		RESOLUTION OF THE BOARD No. 34 Astana city

On Amendments and Additions to Certain Resolutions of the Board of the National Bank of the Republic of Kazakhstan on Issues of Management of Gold and Foreign Exchange Assets of the National Bank of the Republic of Kazakhstan

The Board of the National Bank of the Republic of Kazakhstan RESOLVES:

1. Make the following changes and additions to the Resolution of the Board of the National Bank of the Republic of Kazakhstan dated June 17, 2015 No. 112 "On Approval of the Investment Strategy for the Management of Gold and Foreign Exchange Assets of the National Bank of the Republic of Kazakhstan":

in the Investment Strategy for the Management of Gold and Foreign Exchange Assets of the National Bank of the Republic of Kazakhstan, approved by the said resolution:

rephrase paragraph 5 as follows:

"5. ZVA consists of a liquidity portfolio, an investment portfolio, a strategic portfolio, an emerging markets portfolio, a ZVA alternative instruments portfolio, and a gold portfolio.

The total volume of the liquidity portfolio, the investment portfolio, and the external gold of the gold portfolio is not less than two-thirds of the total volume of ZVA minus the internal gold of the gold portfolio.

Target distribution of assets between the investment and strategic portfolios of ZVA:

1) up to 70 (seventy) percent – investment portfolio;

2) not less than 30 (thirty) percent – strategic portfolio.";

rephrase sub-item 5) of paragraph 7 as follows:

"5) derivative financial instruments;";

rephrase paragraph 10-1 as follows:

"10-1. Transfers of assets between ZVA portfolios, determination of the names of assets intended for transfer, and their volume, are carried out on the basis of a proposal from the monetary operations department with the permission of the Chairman of the National Bank or the Deputy Chairman of the National Bank overseeing the monetary operations department. For these purposes, the formation of a temporary portfolio of transferable assets is allowed, indicating a transit period with a term of no more than 1 (one) month, the investment of which is carried out through operations with financial instruments provided for in paragraph 8 of the Strategy.";

add paragraph 17-1 of the following content:

"17-1. Proceeds from the sale of gold for the purpose of changing the structure of ZVA, taking into account the recommendations of the Investment Committee of the National Bank, are credited to the liquidity portfolio.

Transfer from the liquidity portfolio in an amount exceeding the volume of obligations of the National Bank to second-tier banks and other clients by 1 (one) billion US dollars is carried out quarterly into the investment and/or strategic portfolios in accordance with the target distribution determined in paragraph 5 of the Strategy.

In case of insufficient volume of assets in the liquidity portfolio to service the obligations of the National Bank to second-tier banks and other clients, a transfer is carried out from the investment portfolio to the liquidity portfolio.";

rephrase paragraph 51 as follows:

"51. Assets of the emerging markets portfolio are formed from currencies of countries with which agreements have been concluded with central banks on the purchase or sale (exchange) of their official currency and the Kazakhstani tenge, as well as from the official currency of the Russian Federation.

By decision of the Board of the National Bank of the Republic of Kazakhstan, it is allowed to transfer assets of the emerging markets portfolio for management by the International Bank for Reconstruction and Development within the framework of the advisory and asset management program (The Reserve Advisory & Management Partnership).

The volume of the portfolio does not exceed 10 (ten) percent of the volume of ZVA.";

rephrase the first part of paragraph 72 as follows:

"72. As collateral for securities lending operations, securities with a minimum credit rating of not lower than A+ (Standard & Poor’s)/A1 (Moody’s) or an equivalent credit rating of other international rating agencies are accepted, as well as government bonds of developed countries included in the benchmark portfolio of the investment portfolio, the market value of which at the time of opening the transaction is not less than 102 (one hundred and two) percent of the market value of the security provided for lending under collateral (Securities Lending).".

2. Make the following change to the Resolution of the Board of the National Bank of the Republic of Kazakhstan dated July 31, 2023 No. 59 "On Determining the Basic Principles of Management of Assets in Foreign Currency and Precious Metals, Including Their Structure":

in the Basic Principles of Management of Assets in Foreign Currency and Precious Metals, Including Their Structure, approved by the said resolution:

rephrase sub-item 1) of paragraph 2 as follows:

"1) alternative instruments – asset classes intended to increase profitability in the long term (emerging market equities, high yield bonds, absolute return products, hedge funds, fund of hedge funds, fund of funds, private equity, private credit, distressed securities, real estate investments, infrastructure investments, direct investments (strategic investments and co-investments));".

3. The Department of Monetary Operations of the National Bank of the Republic of Kazakhstan (Tursunkhanov N.A.) to bring this resolution to the attention of the interested departments of the National Bank of the Republic of Kazakhstan.

4. This resolution enters into force from the day of its adoption.

5. Control over the implementation of this resolution is entrusted to the Deputy Chairman of the National Bank of the Republic of Kazakhstan Moldabekova A.M.

Chairman	T.M. Suleimenov

Copy is correct:

Chief Specialist-Secretary of the Board Zh. Mukhambetova

1. On amendments and additions to certain resolutions of the Board of the National Bank of the Republic of Kazakhstan on issues of management of gold and foreign exchange assets of the National Bank of the Republic of Kazakhstan ↑