Kazakhstan’s central bank said it sees no grounds for a devaluation of the national currency, the tenge, which has depreciated against the dollar for 21 consecutive trading sessions.
The National Bank of Kazakhstan will continue to “soften sharp fluctuations of the tenge without influencing the general trend” of the exchange rate as determined by market forces, the regulator said in a statement distributed today in Almaty, the nation’s commercial capital, where the bank is based.
The tenge’s 1 percent drop in July amounts to a “technical correction,” central bank Chairman Grigori Marchenko told reporters today. The regulator’s net interventions on the domestic currency market in the past three years and the first half of 2013 were “practically equal to zero,” he said.
Kazakhstan, the biggest energy producer in central Asia, devalued the tenge by 21 percent in February 2009, with the global financial crisis that followed the collapse of Lehman Brothers Holdings Inc. forcing the government to seize control of BTA Bank, its biggest lender at the time, and spend billions of dollars to prop up the economy.
The central bank in December 2009 widened the trading band used to control the exchange rate of the tenge against the dollar and scrapped the corridor in March 2011. The tenge has appreciated more than 5 percent since then to 153.32 per U.S. currency today, according to data compiled by Bloomberg.
Without a sharp devaluation of the ruble in neighboring Russia, Kazakhstan faces no risk of its currency collapsing, according to Marchenko. The tenge will face little pressure until the ruble depreciates to 36 against the dollar, he said.
The Russian currency retreated 0.4 percent to 32.5760 per dollar at 5 p.m. in Moscow. It last traded weaker than 36 per dollar in March 2009.
To contact the reporter on this story: Nariman Gizitdinov in Almaty at firstname.lastname@example.org
To contact the editor responsible for this story: Stephen Voss at email@example.com