Kazakhstan’s central bank will expand the currencies it targets to include the euro and the ruble as it seeks to smooth exchange-rate fluctuations.
The new peg, which will come into effect from Sept. 2, will reduce the “speculative sentiment on the market and subdue the negative impact of speculative flows,” the Almaty-based regulator said in a statement sent by e-mail today. The changes will reduce the role of the dollar in the local currency market and in trade, it said.
The currency basket will be made up of 70 percent dollars, 20 percent euros and 10 percent rubles, the central bank said.
There are no grounds to devalue the Kazakh tenge, which has weakened 1.1 percent since May 22 amid concern the U.S. will pare back stimulus, the central bank said July 25. The bank devalued the tenge by 21 percent in February 2009.
Kazakh central bank Chairman Grigori Marchenko has urged Kazakhstan’s customs union partners Russia and Belarus to align their currency policies to avoid “sharp, unilateral” devaluations.
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