Abundant foreign inflows buoy excessive liquidity in the banking system
Thanks to abundant USD supply, including USD1.1bn in disbursed FDI, a trade surplus of nearly USD200mn, strong inflows to the bond and stock markets as well as participation in SOE IPOs, the SBV purchased USD3.5bn in January and added around USD3.0bn during February 1-8, bringing its foreign reserves to around USD59bn, which is sufficient to cover nearly 3.4 months of imports.