Improving Public Debt Management
In the OIC Member Countries
145
obligations started to increase in 2014, which can be attributed to the general increase in
public debt levels after 2013 and the oil price decline in 2014/2015. The recent large
fluctuations of the yield on shortterm notes of the NBK may be the result of the decision of the
government to float the Tenge in 2015.
Figure 4-31: Kazakhstan - Yields on Government Securities
Sources: National Bank of the Republic of Kazakhstan (2016), calculations by the Ifo Institute.Kazakhstan is actively participating in the international bond markets. In 2014, Kazakhstan
has issued its first international dollardenominated bond since 2000 (Cox 2014). The issuance
was worth of $2.5 billion and consisted of 10year bonds (1.5 billion) with a yield of 1.5
percentage points above midswaps and 30year bonds with a yield of 2 percentage points
over midswaps. Longterm maturities were chosen in order to build out a yield curve
(Porzecanski and Pronina 2014). In 2015, Kazakhstan issued the same amount with the same
maturities again (Pronina 2015).
With the introduction of the law on Islamic banks and Islamic finance in 2009, Kazakhstan has
approved Islamic finance. The laws specify the rules concerning Islamic finance instruments
and allow the issuance of Islamic finance instruments both for private and public institutions
(NBK 2013). The first Islamic Bank in Kazakhstan opened in 2009 (a subsidiary of the bank AlHilal from the United Arab Emirates). With the transfer of the Financial Centre from Almaty to
Astana (supposed to be implemented in 2017) the bank is intended to open a major Islamic
finance market. The first quasisovereign sukuk was issued in 2012 by the stateowned
Development Bank of Kazakhstan in Malaysia and amounted to around $73 million (Vizcaino
2015). The NBK held an international workshop about “Islamic Modes of Finance and Sukuk”
in 2012 (NBK 2012) and legislative amendments have been adopted in order to facilitate
Islamic finance further.
There is no use of Islamic finance in public debt management until now, although the budget
code makes provision for issuing state securities in the form of state Islamic securities. The
state Islamic securities are allowed to be issued in accordance with the basic principles of
Islamic finance and certify “the right of the holder to receive income from the assets on the
basis of the sublease agreement” (Republic of Kazakhstan 2008, Article 206). The introduction
0 2 4 6 8 10 12 14 16 18 20
01.06 08.06 03.07 10.07 05.08 12.08 07.09 02.10 09.10 04.11 11.11 06.12 01.13 08.13 03.14 10.14 05.15 12.15 07.16
Shortterm Notes of NBK with 7 days to 1 year
maturity
МЕIКАМ: Indexed Government Treasure
obligation with 3 month and above maturity
MEOKAM: Mediumterm Government Treasure
obligation with above 1 year till 10years
maturity МЕUКАМ: Longterm Government Treasure
obligation with above 5 years maturity
МЕUZКАМ: Longterm Savings Government
Treasure obligation with above 5 years
maturity МUIКАМ: Longterm Indexed Treasury Bill
Refinancing Rate of NBK