Money-credit policy of the National Bank of Kazakhstan

In other words, when cheap money velocity of money decreases, the reverse course of events, dear money policy causes an increase in the velocity of circulation. And we know that the total cost can be considered as the money supply multiplied by the velocity of money. And, therefore, for easy money policy, as stated above, the velocity of circulation of money decreases and, hence, the overall costs are reduced, which contradicts with the policy objectives. A similar phenomenon occurs when the dear money policy.

At the heart of monetary policy is monetary theory, which studies the effects of money on state of the economy as a whole.

Among economists there is debate caused by two different approaches: the Keynesian theory and monetarism. So what are these differences?

Keynesian theory of money.

John Maynard Keynes and his followers believed that the market has an internal structure of the economy, «vices» that she is unable to regulate itself. This is particularly reflected in unemployment, inflation, frequent economic crises. Keynesians have concluded that the state should actively intervene in the economy to prevent crises and promote stability, should be a tight fiscal and monetary policy. They recognized that the change in money supply affect nominal GNP, and the basis for monetary policy must be put to interest rate (since, by changing interest rates, we change the investment activity, and through the multiplier effect - the nominal GNP).

Keynesian fundamental equation is:

GDP = C + I + G + NX

(C - consumer spending, I - investment, G - government spending on goods and services, NX - net exports).

Keynesians believe that fiscal, or budget, the policy is more effective in times of economic crisis than monetary policy.

According to Keynesians, the velocity of money is variable and unpredictable. The Keynesian view is that the money is needed not only for transactions, but also for possession of an asset. «They move in» just money «for transactions, money - assets are not involved in trafficking. Therefore, the greater the relative importance of the money used for transactions, the higher the velocity of circulation.

Expansion of money supply will lower interest rates. As soon as is now becoming less expensive to have money as an asset, the population will keep more cash assets with a zero velocity of circulation. Therefore, the overall velocity of circulation declines.

Thus, the velocity of money varies in direct proportion to the interest rate and inversely proportional to the money supply. If so, then a stable relationship between money and net national product is missing, since the velocity of circulation changes with the money.

Above it was noted that for fighting inflation to limit the money supply.

Keynesians hold a different opinion here. They believe that the decrease in money supply may lead to reduced demand, leading to a decline in production, which in turn will increase inflation.

In fact, everything depends on the situation in the market. If in the inelasticity of supply of goods to increase the money supply, then it will only lead to higher prices - inflation.

If the market supply is elastic (a lot of products - not enough money), then with the increase in money supply will increase production, hence, inflation will subside.

Keynesians believe that the main problem in the state regulation is hastening the effective demand, rather than fighting inflation, which should be adjustable in nature.

Monetarist approach.

At 70 years, has the crisis of Keynesianism. On the ideas of the school taking over the ideas of monetarism, which is primarily a theorist Milton Friedman, the renowned American economist.

Monetarists believe that the market economy is an internally stable system. All adverse moments - a consequence of unreasonable government interference, this must be minimized.

Monetarism's emphasis on money. Representatives of this school believe that the relationship between GDP and money supply stronger than between investment and GNP. Such a conclusion is drawn from the equation I. Fisher:

MhY PhG = (M - money supply, Y - the velocity of circulation, P - price index, G - number of products)

After all, if you count that GNP = PhG, and Y is stable (or its variations are predictable), the GNP depends on the mass of money in circulation.

In conclusion, we note that the modern model of monetary policy based on Keynesian and monetarist ideas.

Formation in our country market relations objectively determines the acquisition of whole range of mechanisms of economic regulation. Sometimes prevailing notions of spontaneity and economic processes in market economy are not unfounded. Regulated, and very tough, almost all the major relationships that determine the effectiveness and viability of the economy as a whole. Among them, its importance highlighted and monetary instruments.

3. Analysis of monetary policy National Bank of Kazakhstan

3.1 The monetary policy of the National Bank in this year

Scenarios for the economy of the Republic of Kazakhstan for 2010

The slow recovery of world economy, moderate world prices of commodity markets, including for basic commodities of Kazakhstan's exports, the continuing uncertainty in global financial markets will be key factors that will determine the economic trends of the Republic of Kazakhstan.

In 2010, the expected decline in foreign direct investment in Kazakhstan, mainly due to reduced funding of the North-Caspian project, which peaked in 2009.

Despite the fact that access to domestic banks in the world market with long term financial instruments will be limited, not eliminated the resumption of foreign borrowing by some banks, as well as to continue funding begun in 2007-2009 projects in the real sector.

A possible outflow of resources in 2010, is associated with an increase in revenue to the National Fund of the Republic of Kazakhstan, will be determined by the level of world oil prices and a mechanism for the accumulation and use of the National Fund of the Republic of Kazakhstan.

Given the degree of impact on the economy of the Republic of Kazakhstan, a key criterion for separation of scenarios for the development of monetary policy in 2010 was determined the level of world oil prices. Considered three scenarios for the macroeconomic situation. In this case, the first and second scenario, which assumes a level of oil prices in the 30 and 50 dollars per barrel, respectively, are synchronized and consistent with the estimates of Government of the Republic of Kazakhstan to the formation of the socio-economic development of Kazakhstan for 2010-2014. Also, given the established in 2009, the average level of oil prices, the National Bank of Kazakhstan was developed by a third scenario in which oil prices are estimated at $ 70 per barrel.

With the implementation of all scenarios of economic development of Kazakhstan in 2010, the main purpose of the National Bank of Kazakhstan is to ensure price stability, which suggests keeping inflation within the corridor 6,0-8,0%.

Under the first scenario, the economy of Kazakhstan is expected to decline in 2010.

Received the National Bank of Kazakhstan modeling and prediction in this scenario show deterioration in the balance of payments, reduced credit and money supply. This is due to the influence of objective factors, such as a decline in business activity, restriction of aggregate demand.

The current account deficit of balance of payments in 2010 could amount to about 8,5% of GDP, the total balance of payments deficit - more than 4% of GDP.

Keeping inflation within a given corridor while reducing the economy's demand for money will be provided by contraction of the monetary base by 2,3%, a decrease in the money supply by 4,7%, loans to the economy - at 1.4% of deposits in the banking system - on 5,4%. Monetization with virtually no change, reaching 45.9% at the end of 2010 (Annex 1).

According to the National Bank of Kazakhstan, the likelihood of this scenario is quite low.

In the case of the second scenario, higher oil prices will have a positive impact on external flows of Kazakhstan; as a result of the current account deficit in 2010 will be approximately 4% of GDP, the deficit of the general balance of payments - about 2% of GDP.

Demand for money in this scenario will remain limited. Expansion of the monetary base grew by 10,0%, money supply increased by 9.6%, deposits in the banking system - by 9,2%, the volume of loans to the economy - by 5.9%. The level of monetization to grow to 46.5% (Annex 1).

Development of the situation in this scenario would allow the National Bank of Kazakhstan and the Government of the Republic of Kazakhstan in 2010 to stimulate economic activity that will provide a moderate rate of economic growth.

In accordance with the third scenario, economic growth in 2010 expected at a higher level than in previous scenarios.

More favorable situation on world markets have a positive impact on Kazakhstan's exporters. Expected a slight current account deficit at not more than 1% of GDP, the overall balance of payments was a positive sign at a rate of about 1% of GDP.

Under these conditions, the demand for money will be higher compared to the previous scenario. The monetary base expanded in 2010 to 11,3%, money supply increased by 15,4%, deposits in the banking system - by 15,2%, loans to the economy - by 8,5%, the level of monetization will be 46.5% (Annex 1).

Implementation of this scenario allows the National Bank of Kazakhstan to increase the volume of gold assets.

National Bank of Kazakhstan considers the most likely implementation of the second and third scenarios of economic development of Kazakhstan for 2010, based on that developed measures of monetary policy in 2010.

Monetary policy of the Republic of Kazakhstan for 2010

The main goal of monetary policy is price stability. Measures of the National Bank of Kazakhstan to achieve this goal will help sustain economic growth, capacity development of the deposit market, as well as the restoration of credit activity of the banking sector.

National Bank of Kazakhstan will continue to conduct exchange rate policy aimed at ensuring a balance between internal and external competitiveness of the Kazakh economy. Exchange rate policy will be conducted in order to avoid significant fluctuations in the real currency appreciation, which may adversely affect the competitiveness of domestic production in a constantly changing world situation.

In order to create conditions to increase the flexibility of exchange rate fluctuation corridor tenge, February 5, 2010 will be expanded: $ 150 / m. (+) 10% or 15 tenge (-) 15%, or 22.5 tenge. The prevailing trend in the tenge will be determined by the situation in global financial and commodity markets and balance of payments.

Interest rate policy of the National Bank of Kazakhstan will be aimed at retaining market rates on short-term money market instruments within the corridor rates of the National Bank of Kazakhstan. Activities will promote reduction in the volatility of market interest rates and increasing the stability of money market and promote the effective management of liquidity. The official refinancing rate, which is the upper limit of the corridor will be determined based on the situation in the money market and inflation. Interest rate on bank deposits, hosted by the National Bank of Kazakhstan, will be defined as lower limits of short-term money market rates. In this case, it will be set at the lowest possible level in order to discourage banks in the accumulation of free resources on deposit at National Bank of Kazakhstan.

To withdraw excess liquidity of the National Bank of Kazakhstan will continue to issue short-term notes. Their release is also aimed at maintaining a secondary market for government securities, the formation of the yield curve on financial instruments for up to 1 year.

With the expected modest inflationary pressures from the fundamental factors of the National Bank of Kazakhstan will take measures to ensure financial stability. Continue to monitor the level of bank liquidity and related risks, including currency. If necessary, the National Bank of Kazakhstan will provide refinancing loans to maintain the current liquidity of banks. Terms of these transactions will be short.

National Bank of Kazakhstan will contribute to further reorient banks on domestic sources in the formation of base funding. To this end, the National Bank of Kazakhstan will increase in 2010, the capitalization of JSC «Kazakhstan Deposit Insurance Fund» at 11 billion tenge.

Also to stabilize the resource base of banks will consider the transfer of temporarily free funds of non-bank financial institutions that are placed in the National Bank of Kazakhstan, on deposits of domestic banks.

Implementation of these measures of monetary policy will allow the National Bank of Kazakhstan to achieve the established benchmarks for inflation. This will help to ease the economy on the path of sustainable and quality growth.

In the current year, monetary policy is conducted in accordance with the main directions of monetary policy in 2010. And our main goal now is to keep annual inflation within 6-8% at the end of 2010.

The National Bank has a strong enough tool that allows us to restrain inflationary pressures in the economy. This administration official refinancing rate, and the establishment of minimum reserve requirements for commercial banks and the issuing of short-term notes of National Bank of Kazakhstan, and deposit taking banks.

Moreover, despite the fact that the official refinancing rate and minimum reserve requirements are currently at the minimum level, the volume produced short-term notes and deposits attracted from banks rather high. So, for January - September 2010 compared with the corresponding period last year, the short-term notes issued by the increased 2,5 times - up to 2.5 trillion tenge. This represented 93.2% of the total demand of market participants on these types of government securities. The volume of notes in circulation in September 2010 compared to December last year grew by 2,1 times - up to 1 014.4 billion tenge. In January - September 2010 National Bank issued short-term notes with maturity of 3 and 6 months

From banks in January - September 2010 was drawn in the amount of deposits 13.6 trillion tenge, which is 25,4% more than in January - September 2009. Balances on bank deposits in the National Bank decreased by 24,8% compared with December 2009 to 367.5 billion tenge at the end of September 2010. During this period the National Bank of attracting deposits from commercial banks for a period of 7 days at a rate of 0,5% and for 1 month at a rate of 1%.

In January - September 2010 through the issuance of short-term notes and deposits from banks were sterilized 419.7 billion tenge. Keeping inflation at low levels also contribute to the national bank to ensure stability of the tenge exchange rate.

Certainly, ensuring price stability in Kazakhstan is the main objective of monetary policy the National Bank, and it is enshrined in law. However, the solution of this question is also relevant for the Government, including line agencies and local executive bodies. Because high inflation, inadequate folding macroeconomic conditions are not favorable to anyone. In this case, is now widely understood that since inflation - is multifactorial and very complex phenomenon, only the monetary levers to control it enough. It requires balance and reasonableness of the actions of all government agencies involved in the process of ensuring stability in the consumer market.

Therefore, in this year's National Bank jointly with the Government conducts a number of measures in the anti-inflationary policy. There are a number of policy documents in which this work is regulated and coordinated. To stabilize the situation in the consumer market, the main efforts are aimed at preventing unjustified growth of prices for the main groups of goods and services to the public. Also being taken to saturate the domestic market essential commodities, stop unfair competition, abuse of market players to their dominant position. In addition, in regions of the country is taking steps to replenish stocks of food.

Under the provision of internal and external stability of the national currency is meant to ensure low inflation and stable exchange rate of tenge. And this question can be answered confidently, that such problems in 2010 did not arise. Inflation rate is within the projected current year corridor of 6-8%. As for the tenge, the end of 2009 the trend of strengthening the national currency, and in 2010 the tenge to the dollar changed in a narrow range 146,41-148,40 tenge per 1 unit of U.S. currency.

In 2010, the situation in the domestic foreign exchange market has stabilized, helped by the measures the National Bank, as well as the favorable pricing environment in the basic positions of Kazakhstan's exports. Moreover, since the end of 2009 the trend of strengthening the national currency.

With regard to our participation in the domestic foreign exchange market, then in 2010 the National Bank managed to fill the volume of international reserves. Thus, for 9 months of this year the volume of purchases of foreign currencies by the National Bank on the domestic market exceeded 2.5 billion dollars. In this case, most of these transactions took place at the beginning of the year, while in recent months; part of the National Bank on the domestic market is minimal.

If we compare the policy of the National Bank in the exchange rate in 2010, it differs significantly from the policies pursued in 2008-2009. In late 2008 - early 2009 in the domestic foreign exchange market showed a significant increase in negative devaluation expectations. In this case, the National Bank took significant effort to ensure exchange rate stability and the preservation of implicit corridor within 120 tenge per U.S. dollar ± 2%. During the period from October 2008 to February 2009, the NBK has used more than $ 9 billion to ensure stable exchange rate of tenge.

However, the situation in early 2009 in the global economy, including the devaluation of the currencies of countries - trade partners of Kazakhstan, and a significant decline in energy prices, which are the basis of Kazakhstan's exports, an unsustainable balance of payments indicators for 2009 and could lead to their sharp deterioration. In this regard, the National Bank in February 2009 was carried out devaluation. This not only greatly reduces devaluation expectations in the market, but also to ensure the restoration of competitiveness of domestic producers and conservation reserves.

3.2 Forecast of socio-economic development of Kazakhstan for 2010-2014

External conditions of development

Following the global recession in 2009 with the 2010 forecasts of international organizations are expected gradual increases in economic activity. However, since the global recession is estimated IMF deep enough, rise, respectively, will be slow

Active anti-crisis measures in countries in conjunction with the restoration of confidence in the financial system can help accelerate recovery.

In the medium term will correction of global financial markets caused by the global financial crisis, the redistribution of global capital in order to reduce risks.

Global economic recovery and higher rates of growth in the medium term will increase the demand and rising prices for resources.

Given the prospects for the world economy in the medium term, a sharp rise in prices on world commodity markets is expected.

International organizations predicted a gradual increase in world prices for oil and metals.

Since 2010 the expected increase in oil consumption in the world at 1,5-3% annually until 2014.

According to the forecasts of international organizations the world oil price in 2010 will be in the range of 70-80 dollars per barrel.

According to forecasts ABARE (Bureau of Economic Research in Agriculture, Mining industry and Energy of the Government of Australia) in 2010, expects a gradual increase in global consumption of metals by an average of 4-6% per year until 2014, which will contribute to higher prices for metals.

In the medium term, a time of global financial markets will remain the problem of lack of liquidity.

There are various expert assessments of a possible second wave of global economic and financial crisis in 2010, leading to deterioration in the global economy, the next and more significant drop in prices on world commodity markets. As a result, the global economic recovery could move over to a later period.

Despite the improving economic situation, a number of restrictions that may slow global growth. Amid rising unemployment in developed countries a decrease in investment and consumer spending. The ability of governments to continue the policy of fiscal stimulus are limited to growing fiscal deficit, but the abolition of incentives facing the decline of the already small domestic demand.

In addition, if we consider that in 2009 the world consumption and production of energy and metals is largely supported by China's buildup of domestic supplies of raw materials, reducing consumption of resources in the world market and the transition of China's domestic reserves might lead to another collapse of prices on world commodity markets and drop in production. Deployment of the second wave of global financial crisis will lead to yet another drop in the global economy and delay the start of its recovery at a later period.

Trends in the development of world economy and external conditions for the development of Kazakhstan's economy allow us to consider three possible scenarios depending on the dynamics of the world economy, world prices for oil and the situation on world financial markets.

Under option 1 (pessimistic scenario) are assumed to be extremely pessimistic forecasts regarding the deteriorating situation on world commodity and financial markets in the medium term.

Under this scenario assumes a fall in world oil prices (Brent) in 2010 to U.S. $ 30 per barrel and its further increase to $ 35 in 2011 and to $ 40 in 2012-2014.

Global financial markets will be closed to external borrowing. Option 2 involves stabilizing the situation on world commodity and financial markets and improving conditions for external borrowing.

World oil prices in 2010-2014 years will be at the level of the average 60 - $ 65 per barrel.

World prices for metals in the medium term will be increased by an average of 5 - 8% annually.

Under option 3 (optimistic scenario), world oil prices in 2010-2014. Will be located at an average of 80 dollars per barrel.

Improve the situation on world financial markets, open access second-tier banks to borrow externally.

Based on the current situation in world economy and on world commodity markets, the most probable option 2. Key values of exogenous parameters on this option are close to the emerging trends of development.

Local conditions for the development

After a period of crisis, the Kazakh economy enters a period of post-crisis development, which involves: a period of recovery growth period and high-quality and balanced growth of the economy.

The duration of the recovery growth will depend on trends in the global economy. Given the current conditions of development of Kazakhstan's economy as well as forecasts of international experts regarding the prospects for the world economy, the stage of recovery of economic growth in Kazakhstan can be completed by 2012. It is estimated that by 2012 per capita GDP will reach 2008 levels, the highest figure for previous years.

During the period of recovery growth will be formed the basis for moving towards a balanced and qualitative growth of the economy.

Given the external conditions for economic development of Kazakhstan in 2010-2014 years will evolve under the influence of these internal factors.

As the global economic recovery and improvement in external demand for exports of Kazakhstan will be restored growth of industrial production through the introduction of reserve capacity. Thus, to increase the activity in the metals industry and related industries the mining industry.

In addition, in 2011-2014 years in Kazakhstan will be observed activity in the sectors of oil and natural gas, expressed in increasing oil production.

Maintaining economic activity will contribute to conservation activities in the public sector, and measures of state support sectors of the economy, implemented under the Joint Action Plan of Government, National Bank and the FSA to ensure the stability of the economy and financial system in 2009-2010 years (hereinafter - the plan).

Contained in the Plan funds for the agro-industrial complex, small and medium-sized businesses, construction will provide increased activity in agriculture, manufacturing and service sectors, including trade and transport.

To avoid the high costs of restoration of economic sectors affected by the impact of external shocks that require adjustment of it's managed by the state. The policy of government regulation should be balanced, stimulating the economy without compromising macroeconomic stability. During the period of balanced and qualitative growth of the economy such an approach would «improve» the economy, to avoid its recurrence «overheating» in the future and improve the quality of investment.

Maintaining stable and dynamic economic growth with tight coupling to the dynamics of the global economy would be impossible.

At this stage the task is not only to find a way out of crisis, but also by analyzing past mistakes, to identify key priorities and directions for future growth, to develop the basic approaches for constructing a new development model in post-crisis period. Sustainability of economic development will be a re-sources of growth in domestic demand and supply factors and enhance their role in the growth, development of non-extractive industries, the domestic demand, and industries with international competitiveness - the so-called «core» of the economy.

Economic diversification and development of non-tradable sectors will facilitate the program of forced industrial-innovative development of the country's economy in 2010-2014 years. The implementation of industrial policy will create new jobs in the economy, and will promote quality of its growth.

Positive impact on the economy will have a major investment projects.

Factor stimulating economic growth, will also be securing the necessary level of money supply and lending economy banks. Increased lending activity of banks will facilitate the recovery of the banking sector as a result of principal repayments on external debt service, improved asset quality of banks. In addition, the restoration of confidence of economic agents in the banking system will ensure the growth of deposit base and the completion of banks' resource base through internal sources.

Full implementation of internal capacity development will in the future to ensure sustainable economic growth, sufficient to adapt to increased competition in the markets after the crisis, as well as to adapt to the challenges of long-term prospects.

3. Target indicators of socio-economic development Republic of Kazakhstan

Target indicators of socio-economic development on economic growth, income, employment and inflation, will be identified in the Strategic Plan for Development of Kazakhstan till 2020.

In order to ensure, by 2020, given the parameters of economic growth compared to 2010 in 2010-2014, real GDP is expected to increase by 15,7%.

To ensure the accession of Kazakhstan to the year 2020 the number of countries with high income in terms of GDP per capita, this figure will be increased to levels higher than 10 thousand dollars. USA 2014.

Reduce inflation in the long run will contribute to reducing its level in the medium term with 6,0-8,0% in 2010 to 7% at the end of 2014.

To ensure the level of unemployment in 2020 at a level no higher than 5% in 2010-2014 it is planned to decrease to 6%.

Economic policy and forecast of social and economic development for 2010-2014 years

Aims and objectives of economic policy

During the period of recovery growth rate of industry growth to slow during the crisis should reach pre-crisis level, and then come to the fore laying the groundwork for expanding production capacity in Kazakhstan.

The aim of economic policy in 2010-2014 years - the restoration and maintenance in the future quality and balanced growth of the economy.

Recovery of the real GDP growth, high-quality and balanced growth of economy possible while ensuring a supportive macroeconomic environment. In turn, the quality and sustainability of economic growth in the medium term should be provided with «kernel» of the economy.

To achieve the goal of economic policy will address the following main tasks:

- Macroeconomic stability and restore economic growth;

- Forming the «nucleus» of the domestic economy.

To perform the tasks necessary to form a complete system implementation of macroeconomic policies, including a balanced use of instruments of monetary, fiscal and structural policies.

Structural policies will aim at enhancing the role of domestic factors in ensuring sustainable economic growth. To do this would be implemented restructuring the economy towards the development of «non-extractive» industries, the domestic demand. As the recovery of economic growth will be driven by the accelerated development of industries with international competitiveness of industries and the «core economy».

The implementation of structural policies will be implemented under the new Tax Code, which stimulates an increase in the share of non-primary sectors in the economy and accelerate the modernization of the economy.

In the framework of structural policy provides:

- Public investment in priority areas of socio-economic development;

- Government support for the development of non-extractive industries, increase their investment attractiveness;

- Promotion of long-term investment in primary sectors of economy with the participation of development institutions;

- Stimulating the investment activity of the private sector; Also, further development, a mechanism of public-private partnership.

To restore economic growth will be challenging monetary policy aimed at ensuring the volume of money supply needed to increase economic activity, but not to give in inflationary pressures on the economy.

However, long a policy of «cheap money» can contribute to accelerating inflation. Therefore, as the recovery of economic growth focus of monetary policy will shift toward an anti-inflationary adjustment.

Monetary policy will be formed depending on the changing situation in world and domestic economies. The main instruments of monetary authorities will issue short-term notes, deposits of banks, changes in minimum reserve requirements. Rates of the National Bank will be regulated depending on the prevailing situation in the money market.

In the domestic foreign exchange market will not be tolerated sharp short-term fluctuations in the exchange rate of tenge caused by speculative factors and changes in supply and demand of foreign currency.

In conjunction with structural measures and monetary policy fiscal policy will be aimed at creating conditions for economic recovery and stimulate further growth.

Stimulating the economy will take into account not harm to macroeconomic stability.

In the framework of fiscal policy provides for maintaining the level of public spending, providing on the one hand the level of aggregate demand, on the other - the level of investment activity through public investments needed to restore growth.

Will be disciplined and efficient management of oil revenues.

In addition, measures of structural, monetary and fiscal policies will contribute to a «safety margin» of the economy, reducing its vulnerability to external shocks, neutralize threats to the recurrence of overheating the economy and development of «Dutch disease» in the future.

The forecast of socio-economic development for 2010-2014 years

The basis for balanced economic growth in the medium term will be as stimulating investment process, and consumer activism.

Investment growth in 2010-2014 years at an average of 3.8% per year. This will ensure a sufficiently high growth of capital accumulation that allows an active technological upgrading.

Consumption growth in 2010-2014 years to an average of 2,8%. While public consumption will grow at a faster pace than household consumption.

In general, the Government will provide the following parameters of growth of GDP components.

Accordingly, fiscal policy for the upcoming mid-term will be built based on the need to ensure specified parameters of government consumption and investment.

In 2010-2014 years predicted a gradual increase in real GDP growth of 1,5-2% in 2010 to 3,9% in 2014.

Average annual growth of gross agricultural output in 2010-2014 will amount to 2,1%.

Volume of industrial production in 2010-2014 years will grow by an average of 3.3% per year.

Growth in industrial production would help increase production in mining and manufacturing sector.

The volume of oil and gas condensate production to increase from 76.4 million tons in 2009 to 85.0 million tons in 2014.

The increase in industrial production will boost the volume of construction and transportation services.

Projected increase in growth of construction up to 3,7% in 2014, transport services - from 0,8% to 4,0%, respectively.

Volume of communication services is projected to grow at an average of more than 6.4% per year.

In the medium term, higher prices on world commodity markets and increased production will help increase exports. The growth of domestic income will increase imports.

In 2010, the projected current account deficit to GDP ratio of 2.8% with its gradual decline in 2011 - in 2012 to 1,8%.

Predicted parameters of the balance of payments consistent with the parameters of monetary policy and macroeconomic parameters of development for the medium term.

GDP per capita by 2014, according to forecasts will be more than 10 thousand U.S. dollars.

Pursue restore and maintain sustainable economic growth as priorities involves sustained improvement in the quality and social standards of living.

Projected decline in unemployment from 6,3% in 2010 to 6,0% in 2014.

Forecast of economic and social development for 2010-2014 years before the application.

Macro-economic risks and response mechanisms

When implementing policies to ensure balanced and qualitative growth may attack certain macroeconomic risks, which, depending on the degree of change in the situation require different response mechanisms.

The worsening economic situation due to lack of signs of recovery of the world economy from the crisis, further decline in world commodity prices, closed foreign markets for borrowing, will lead to lower revenues and expenditures of the state budget, reduce foreign currency inflows into the country, exerted on the side of the devaluation of the tenge, lower business and consumer activity and subsequent economic recession.

To further encourage investment, business and consumer activity will be undertaken additional measures to maintain liquidity of economic sectors through:

- Attract additional funds from the National Fund;

- Attract additional resources to support kreditozavisimyh sectors, including through the involvement of public resources, companies and development institutions;

- To maintain liquidity of banks, including through the revision of the minimum reserve requirements.

In the case of improvement - a significant increase in world prices for raw materials, opening up access to external borrowing will increase foreign currency inflows into the country, income and expenditure budget, which in turn may lead to the reinvention of overheating economy, rising inflation and will exert pressure on the tenge exchange rate towards the consolidation and reduce the competitiveness of non-oil exports.

In this case, you must take the following measures:

- Sterilization of excess liquidity and the money issue;

- Enhancement of the National Fund;

- Tightening of fiscal policy (reduction of budget expenditures to a level below nominal GDP growth rate);

- Tightening of monetary policy (through the minimum reserve requirements and regulating rates);

- Increase international reserves of National Bank;

Limiting banking sector risks associated with external borrowing.

In view of the likelihood of re - «overheated» sectors of the economy, the most dependent on bank credit, you must include measures to limit and diversify capital flows and structural adjustment of industries.

Problems and Solutions

The main objective of the National Bank is determined to ensure price stability. As a result of monetary policy is actually subject to the desire of the authorities to reduce inflation, the simplest way - limiting expenditure growth, sterilization of the money supply. To achieve the goal, under-utilized potential for economic growth. However, this policy does not justify itself, because inflation remains at a fairly high level. In an effort to reach a secondary target (slow inflation), you can simply undo the decision objectively the main task - to save steadily positive growth rates.

Instruments of monetary regulation, aimed at fighting inflation should be directed not only against excessive liquidity, how to promote economic diversification and growth. To the fore the problem of refinancing of commercial banks, and as a means not only to maintain their liquidity, but also to ensure long-term liabilities to long-term loans. Monetary mechanisms must play a crucial role in minimizing the possible liquidity crises; have a positive impact on strengthening the economy in general.

Conclusion

Thus, monetary policy - one of the most powerful economic policy instruments at the disposal of the state.

The fundamental objective of monetary policy is to help the economy to reach a total production level, characterized by full employment and price stability. Monetary policy is a change in money supply in order to stabilize aggregate output (steady growth), employment and price levels.

The main task of monetary policy the central bank - to maintain a stable purchasing power of the national currency and ensuring the flexible system of payments and settlements. At the same time the central bank's policy is one of the most important parts of regulating the economy of the state.

With such means as reviewing reserve ratio, the change in the discount rate and open market operations, the Central Bank may have a determining impact on money supply, and through it - the real national product, employment and price index.

Monetary policy largely determines the exchange rates, thereby affecting the efficiency of foreign trade import and export. It can be used not only to change the basic domestic macroeconomic variables, but also to control the trade deficit.

Without the correct monetary policy pursued by the Central Bank, the economy cannot function effectively. In periods of economic recession and rising unemployment, declining productivity should increase the money supply to stimulate investment of financial resources in the production and consumer spending - is necessary to increase aggregate demand. During the period of economic growth, followed by inflation, should reduce the money supply. This is what central banks of issue are.

With the help of monetary government seeks to alleviate the economic crisis, to keep inflation in order to maintain the conditions the state is using credit to stimulate investment in various sectors of the economy.

State regulation of the monetary sphere may be carried out successfully only if the State through the central bank can effectively influence the extent and nature of private institutions as well as in developed market economies is the latter are the basis for the entire monetary system.

Monetary policy - an extremely powerful and therefore extremely dangerous tool. With it you can get out of a deep crisis, but ruled out and the sad alternative - deepening prevailing in the market system of negative trends. Only very well-informed decisions taken at the highest management level after a serious analysis of the situation consider alternative ways of monetary policy on the economy of the state, will give positive results.

The tools of monetary policy are, first of all change refinancing, changes in reserve requirements, open market operations with securities and foreign currencies, as well as the introduction of credit restrictions.

In our country at this stage of a rational monetary policy is to minimize inflation and recession, to prevent rising unemployment.

Thus, the state needs to regulate monetary policy, but within reasonable limits, is necessary to make the liberalization of state regulation in the banking system to invest those sectors of the economy (processing, chemical, transportation, instrumentation), which will promote local production, improve macroeconomic indicators of GDP, percentage of employment, the level of real income.

Bank of Kazakhstan retains continuity in defining the principles of forming monetary policy, subordinating its objectives the main tasks of economic policy. the upcoming 2011-2014 years, reducing inflation, while ensuring the GDP growth still remains the ultimate goal of monetary policy. The task of quantifying the economic policy is to select the best combination of economic growth and inflation. The criterion for this choice should be to improve household incomes in real terms.

In conducting monetary policy, the Bank of Kazakhstan intends to use not only all the currently available tools at its disposal, but also to expand their membership, making the set of available methods for monitoring and managing the money supply is fully adequate folding general economic conditions. However, the possibility and effectiveness of specific instruments of monetary regulation will largely relate to the restoration and development of financial market segments and strengthening the banking system. Achieving these goals will also depend on the availability of appropriate conditions created by the operation of all sectors of the economy and the necessary institutional reforms….

References

1. http://www.nationalbank.kz/? docid=96

2. http://www.zakon.kz/188027-danijar-akishev-iz-tekh-scenariev.html

3. О Национальном Банке Республики Казахстан: Закон РК от 30 марта 1995 года №2185/ Правовая система «Зан» Медиатека ПГУ

4. О банках и банковской деятельности в Республики Казахстан: Закон РК от 31 августа 1995

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