There were no alternatives to the transition to a free floating exchange rate of the tenge in the current economic conditions in Kazakhstan, President Nursultan Nazarbayev stated at a meeting with the heads of large enterprises in Astana.
"We had three choices – either do nothing, sit and wait for the situation to improve. However, the cost of such a policy would be a reduction in production of the country, loss of jobs, and to burn the currency, that is, our reserves, the National Fund, (...) and the state would move to the collapse," he noted.
The second option, the head of state continued, is a smooth depreciation of the tenge within a corridor. "With the bad, uncertain situation on foreign markets, this option would also cost too much of the gold and currency reserves in the country, it would lead to the uncompetitiveness of all of our businesses (...) and in general, to large losses," he explained.
"That is why after thinking and calculating, the most correct choice is the introduction of a free floating exchange rate of tenge, the transition to inflation targeting," Nazarbayev stated.