Kazakh tenge falls by 5.1%

Kazakh tenge falls by 5.1%

The Kazakh tenge dropped to 298.92 per dollar on the Kazakhstan Stock Exchange (KASE) today, the press service of KASE said.

At the end of the morning trading session the current average rate of the dollar rose by 7% to the market exchange rate of the US currency, TASS reports.

The value of the US dollar rose by 5.1% (14.64 tenge) in relation to yesterday's figure, according to a press release.

Kazakhstan began providing a new monetary policy based on a free-floating exchange rate of the tenge on August 20.

Kazakh economist Pyotr Svoik expressed the view that it is more due to psychology than to the real economy. "Faith in the tenge was undermined. The appointment of Daniyar Akishev as the new chairman of the National Bank of Kazakhstan weakened it, because he was a supporter of the devaluation of the tenge," he explained.

"Since last November, when the Nurly Jol program was announced, the National Fund has been transferred from saving mode to expenditure. From this time forward the National Fund loses a billion dollars every month. Of course, this is an uncomfortable situation, they have a keen desire to reduce these costs. Mr Akishev apparently took advantage of his arrival to power and did not prevent a further weakening of the tenge," the expert added.

The economist noted that in the long term the opposite trend will replace the decision to reduce the rate of the national currency. "In fact, due to the devaluation, the decline rate of imports exceeds the decline rate of exports. So sooner or later the lack of confidence in the tenge will be replaced by a real strengthening of it," Peter Svoik believes.

The editor-in-chief of Mir Yevrazii magazine, Eduard Poletayev, told Vestnik Kavkaza that he also associates the current decline of the tenge "with the replacement of the chairman of the National Bank and expectations of the market."

He also recalled that "for a long time the view dominated, according to which the rate is not final and it will be equated to the Russian ruble." "We still have to understand that a new head of the Central Bank has just taken the reins and the Kazakhstan Stock Exchange did not receive any financial investments, so it's even possible that the tenge will fall to 330 per dollar," the expert said.