Experts explained the paradoxically increased number of money transfers from Russia to Kazakhstan

Why Strange Numbers Should Be Skeptical

The volume of transfers from Russia to Kazakhstan in March 2023 increased by 2.7 times. Such data was published by the National Bank of the Republic. Russia accounted for more than half of all remittances to this country – 54%. Against the background of such indicators, one might think that Kazakhstan for Russians is clearly becoming something of a “safe haven” against the backdrop of the impact of sanctions and other crisis events. However, experts are in no hurry to agree with this conclusion and urge to look at the statistics at least in a semi-annual range. “MK” found out why this is the best recommendation and which of the Russians should open accounts in tenge.

The amount of March transfers from Russia to Kazakhstan is equivalent to a total of 12.2 billion tenge, or $27.5 million at the current exchange rate. Compared to the same month last year, transfers increased by a shocking 168%. Recall that in March 2022, against the backdrop of international sanctions in our country, the international payment systems Visa and Mastercard curtailed their work, after which citizens began to look for a replacement, including through the opening of similar cards in CIS banks.

However, experts urge to take such statistics calmly and remind about the arithmetic effect and the influence of geopolitics. “March to March is not correct to compare,” says Artem Tuzov, director of the corporate finance department at IVA Partners Investment Company. — The volume of transfers to Kazakhstan began to grow rapidly from about the middle of last year. And now we are comparing incomparable months.” In addition, it is important to look at the horizon at least 12 months, or even more.

“Essentially, the volume of money transfers from Russia to Kazakhstan has slowed down. If in the fourth quarter of 2022 it was 94 billion tenge, then in the first quarter of 2023 it dropped to 34 billion tenge,” Maxim Osadchiy, head of the analytical department of BKF-Bank, gives an example. – Until March last year, the volume of transfers from Kazakhstan to Russia was stable and significantly exceeded reverse transactions. Then the growth in the volume of transfers from our country to the neighboring republic sharply intensified.” Among the reasons for the decline in transfers from Russia to Kazakhstan in the first quarter of 2023 is the weakening of the migration of Russians, as well as the tightening of local legislation.

Partially, the continuing popularity of Kazakhstan among Russians can be explained by the fact that until recently, not only individuals, but also legal entities, it was relatively easy and quick to open an account in rubles or tenge, as well as receive a card. In addition, in Kazakhstan there is a free conversion of rubles into tenge and there is a Mir card, from which you can withdraw money from ATMs. “Russian businesses are actively opening representative offices in Kazakhstan with their own bank accounts,” recalled Egor Diashov, Director General of the investment company Dialot. “Logistics is also being realigned through friendly countries.” In addition, some Russians began to keep their savings in foreign currency in Kazakhstan, which also supports the growth of financial flows.

Should citizens of our country open bank accounts in Kazakhstan today? According to the professor of the Department of State and Municipal Finance of the Russian University of Economics. G.V. Plekhanov Yulia Finogenova, it makes sense to take such a step in two cases.

Firstly, if a person has a desire to travel, having a bank card of a neutral country in his hands. Or if a citizen has a need for personal or work matters to make purchases in foreign companies that do not accept cards from Russian banks.

Secondly, if the Russians are thinking about starting a business in Kazakhstan, given the prospects there for entering new foreign markets, which are directly closed to Russia right now. International technoparks and financial centers are rapidly developing in Kazakhstan, where Russian high-tech start-ups receive tax incentives and support in setting up a business. Of all the EAEU countries, this republic is what today is commonly called a hub for high-tech organizations, since within a couple of years a company that has opened its office in Kazakhstan can begin to expand to other countries of the world. There are programs to support IT companies, tax preferences for fintech companies, and all this can be used by Russians, the expert noted.