Kazakhstan devalued tenge to save economy, say experts

The Kazakh National Bank devalued the national currency, the tenge, for the following reasons: outflow of capital from BRICS states to advanced countries, instability of the Russian ruble, high devaluation expectations causing mass speculations, efforts to reduce inflation to 3-4%. The previous devaluation happened in February 2009.

Expert Eduard Poletayev reminds that 10% of the Kazakh multi-currency basket consists of the ruble, 20% of the tenge and 70% of the USD. He notes that the situation in 2009 continued for a short period, until all the products bought for old prices were sold.

Andrey Grozin, head of the section for Central Asia and Kazakhstan at the Institute for the CIS States, says that talks about devaluation of the tenge have been going on for 1.5 years, since the Russian ruble started losing value. President of the National Bank Kayrat Kelimbetov said yesterday or the day before, in the words of Grozin, that there was no dire need for devaluation, due to stable oil prices. According to the expert, the value of the Russian ruble dropped by about 7-7.5% in a year, the same is happening with the Turkmen currency. He believes that the tenge was kept at a price of $1 = 155.5 tenge for too long.

Commenting on positive outcomes of the devaluation, Grozin notes salvation of the gold reserves and the benefits national manufacturers will get.

Marat Shibutov, head of the Association of Border Cooperation in Kazakhstan, predicts that the tenge will not drop beyond 195 per $1. Although this value will still have repercussions for importers and living standards.

Kayrat Kelimbetov said that the margin will not exceed 2 tenge per dollar and 3 tenge per euro. Inflation is expected at 6-8% in 2014.

The Kazakh National Bank devalued the national currency, the tenge, for the following reasons: outflow of capital from BRICS states to advanced countries, instability of the Russian ruble, high devaluation expectations causing mass speculations, efforts to reduce inflation to 3-4%. The previous devaluation happened in February 2009.Expert Eduard Poletayev reminds that 10% of the Kazakh multi-currency basket consists of the ruble, 20% of the tenge and 70% of the USD. He notes that the situation in 2009 continued for a short period, until all the products bought for old prices were sold.Andrey Grozin, head of the section for Central Asia and Kazakhstan at the Institute for the CIS States, says that talks about devaluation of the tenge have been going on for 1.5 years, since the Russian ruble started losing value. President of the National Bank Kayrat Kelimbetov said yesterday or the day before, in the words of Grozin, that there was no dire need for devaluation, due to stable oil prices. According to the expert, the value of the Russian ruble dropped by about 7-7.5% in a year, the same is happening with the Turkmen currency. He believes that the tenge was kept at a price of $1 = 155.5 tenge for too long.Commenting on positive outcomes of the devaluation, Grozin notes salvation of the gold reserves and the benefits national manufacturers will get.Marat Shibutov, head of the Association of Border Cooperation in Kazakhstan, predicts that the tenge will not drop beyond 195 per $1. Although this value will still have repercussions for importers and living standards.Kayrat Kelimbetov said that the margin will not exceed 2 tenge per dollar and 3 tenge per euro. Inflation is expected at 6-8% in 2014.