Kazakh Central Bank Won’t Let Tenge Gain Beyond 147.5 to Dollar

Feb. 8 (Bloomberg) -- Kazakhstan’s central bank said it won’t allow the tenge to strengthen beyond 147.5 against the dollar after it widened the corridor used to control the exchange rate last week.

There are “no factors now” that can change the regulator’s stance on the exchange rate, the Almaty-based central bank said in an e-mailed response to questions today.

The tenge will trade within a 147.5 to 149 band against the dollar through Feb. 10, central bank Chairman Grigori Marchenko told newspaper Megapolis on Feb. 1. The exchange rate will move “calmly” after that, Marchenko said then.

The bank said in December it will maintain its target for the average rate of the tenge against the dollar at 150, and extend the trading band to plus 15 and minus 22.5 around that target. The move came into effect on Feb. 5 and the range should remain in place until March 20, 2011, the bank said.

The currency of central Asia’s biggest oil producer is more likely to appreciate against the dollar than weaken, the bank told Bloomberg today.

Kazakhstan devalued the tenge by 21 percent in February last year after the financial crisis forced the government to seize control of BTA Bank, then its biggest lender, and tap $10 billion from its oil fund to prop up the economy. The government said then that the currency may fluctuate about 3 percent either side of 150 per dollar.

Daily exchange rate moves of 0.3 tenge either way would be “nothing terrible,” Marchenko told Megapolis.

The tenge appreciated to 147.96 per dollar at 11:14 a.m. in Almaty, from 148.36 on Dec.30.

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net