Kazakhstan: External Debt to be restructured, say Analysts
Kazakhstani banks will likely restructure their external debts in the "near future" and Kazakhstani companies should not expect loans from foreign lenders any time soon, leading analysts have warned.
"Separate external liabilities are being restructured and the risk of possible restructuring in the near future exists for several banks in Kazakhstan. This is happening because Kazakh banks owe $11 billion to foreign banks (in 2009) and $8 billion in 2010," Alexei Kechko, the associate director of financial institutions at Fitch Ratings agency, said at a conference in Almaty on April 22.
In addition, many foreign banks who received government assistance at home will be unable to lend abroad if they are to meet the terms of their bailout packages, added Nikolai Lukashevich, a senior director at the agency.
"Many western banks have received support from their national governments. The banks are required to support local businesses, which means they will have to cut (out) financing foreign debtors including Kazakh companies," the news agency Kazakhstan Today quoted him as saying.
In the early stages of the financial crisis the Kazakh government denied the need would arise to restructure banks’ external loans. However, Elena Bakhmutova, the chair of State Agency for Financial Supervision, admitted on April 10 that President Nursultan Nazarbayev was "alarmed" by conditions in the banking sector and ordered that the possibility of restructuring foreign debts be explored.
Kazakh banks were estimated to owe external creditors $39 billion at the start of 2009. Kazakhstan’s total foreign debt is $108 billion, according to Eurasianet.org.