Preservation US dollar was 1.7%. The monetary

of favorable conditions in the world economy and on external financial
and trade markets contributed to Kazakhstan’s achievement of sustainable
economic growth and improvement of the macroeconomic situation in the
country. In 2001, the economic growth in Kazakhstan exceeded the indicator of 2000. And it was 10%. In
these conditions, the main activities of the National Bank on monetary
policy were aimed at ensuring low inflation rates and maintaining a
stable nominal exchange rate of tenge. Inflation in 2001 was 6.4%. In 2001, the decline in the tenge against the US dollar was 1.7%. The
monetary base from the beginning of the year expanded by 14.7% to 154.2
billion. For 10 months, the money supply increased by 31.1% to 523.7
billion. The slowing of inflation and a decrease in yield on the
financial market allowed the NBK to gradually reduce the rate refinancing from 14% (the beginning of the year) to 9.Monetary Policy Guidelines for 2002   Since 2002, the benchmarks of monetary policy have been aimed at achieving relative macroeconomic stability in the country. The
main direction of the monetary policy of the NBK in this period was
preparation and transition to the principles of inflation targeting,
which implied a gradual departure from the target values ??for the
monetary base of the gold and currency reserve to the main inflation
indicators. Such
monetary policy meets the main objective of the NB to reduce inflation
and, moreover, provides it with a greater confidence of market
participants and the pursued monetary policy. The experience of countries shows that the following factors are the
basis for successful introduction of the system of inflation target
indicators:• Sustainable budget situation• Guarantees of macroeconomic stability• Stability of the financial system• Independence of the Central Bank• Sufficient understanding of the interrelations between the instruments of the Central Bank• Information opennessIn 2002-2004, the monetary policy of the NBK was aimed at ensuring internal and external stability of the tenge. The main objective of monetary policy was to keep inflation at around
5-7% in 2002 and within 4-6% in 2004 To achieve these goals, the pulp
and paper mill used as its main instrument open market operations and
re-accounting operations with billsIn the long run, this led to an increase in the monetary base by 24%. This multiplied the increase in the money supply at the level of 700 billion tenge. At the end of 2004, inflation was 6.7%. The
persistence of inflation in these limits was facilitated by substantial
economic growth, accompanied by high consumer demand and investment
activity. Over the period from 2000 to 2004, GDP in real reflection grew by
69%, while real wages increased by 60% and investments in fixed assets
increased by more than 5.5 times. However, the persistence of inflation in the economy contributed to a significant increase in monetary aggregates. The consequence of high consumer demand was an increase in cash in circulation by 59% to 379.3 billion.In order to prevent a significant strengthening of the real exchange
rate of the tenge, as well as to smooth fluctuations in the exchange
rate, the NBK participated in the domestic foreign exchange market as a
buyer.  In total, in 2004, the net purchase of foreign currency by the NBK amounted to $ 3.6 billion. As a result, in 2004 the net international reserves of the NBK increased by 87.1% to 9.3 billion.  To curb inflation growth, the NBK in 2004 took measures to strengthen the regulatory impact of official rates. To increase the role of the refinancing rate since 2004, the
bills are re-accounted in accordance with the official refinancing rate.      The objectives and possible results of monetary policy in 2005.            Based
on the current situation in Kazakhstan and the world oil markets, the
main objective of the NBK will be to ensure price stability. Existing
in recent world markets have a positive impact on the macroeconomic
development of Kazakhstan and at the same time cause a number of
problems. One
of them is the excess liquidity of the banking system, including
external borrowings of enterprises in the real sector and commercial
banks, which leads to rapid growth of loans in the economy. The
situation is exacerbated by a significant influx of foreign investment,
as well as an increase in public budget expenditures in recent years. In these conditions, a threat of overheating of the economy is possible.    The goal of monetary policy will be to keep inflation. To
achieve this goal, the NBK strengthens the impact measures on monetary
policy operations and can further enhance the regulatory role of its key
rates. One of the measures may also be an increase in the refinancing rate by mid-2005. However, as the inflation potential in the economy decreases, it is expected to gradually reduce it.    The
NBK’s actions foreseen in the near future will affect the liquidity of
the banking system, which coincides with the intermediate goals of the