Experience of Kazakhstan in bank risks hedging
The article is devoted to the practice of interest rate hedging of bank risks in the Republic of Kazakhstan. It is shown that hedging instruments have many potential applications: borrowers of funds protect themselves from high interest rates on loans can use the futures market, lenders acquire financial futures contracts with a high rate, and protect themselves from falling interest rates, investment portfolio managers fix prices and yield of instruments, which must be purchased in the futures markets, and maintain the current asset value, consumers of foreign exchange can use the foreign currency futures. The author offers some hedging instruments, such as swaps. Changeability of interest rates and exchange rates and their influence on the size of percent risk is stated. The interest rate hedging is a derivative financial tool, which is used to decrease the risk of interest rate increase that is caused by unfavorable conditions of market factors. Swap contract (exchange of payments in accordance with balance sheet characteristics of transaction’s participants) was taken as an example of hedging methods. Offers of such tools provided by the following banks were considered: China Development Bank, HSBC Bank, Bank of China, City Bank, Natixis Bank Kazakhstan, RBS Bank. The most appropriate offers on hedging were defined after a careful evaluation and different scenario options were reviewed. It was defined that Libor development scenario was the most appropriate indicator in the process of interest rate repayment calculations with the use of definite types of hedging.