The Department of Research and Knowledge Management of Samruk-Kazyna Sovereign Wealth Fund of Kazakhstan forecasts stabilization of the national currency in 2016.
"The average exchange rate of the USD-KZT is projected in the range of 355 for 2016," the analytical report of the department says.
The tenge is expected to strengthen gradually moving forward, underpinned by several factors.
First, market players have pushed back the timing interest rate normalization to the second half of 2016, following the US Federal Reserve's dovish comments during March's Federal Open Market Committee (FOMC) meeting.
Second, stabilization in oil prices has mitigated downward pressures on the tenge. Global oil prices registered the biggest gains in four months last week, encouraged by a slew of data releases.
Third, the National Bank of Kazakhstan set its first benchmark interest rate in September 2015 as the country introduced a new monetary policy tool to manage a free floating exchange rate regime. Foreign exchange interventions also affect stabilization of the tenge rate, according to the report.
According to Samruk-Kazyna, foreign exchange intervention by the National Bank of Kazakhstan is only intended to smooth over significant fluctuations in the tenge, Trend reports.
