Kazakhstan Intervenes to Deter Speculators as Tenge Extends FallBy
Kazakh central bank says it sold $144 million on Wednesday
No fundamental reasons for tenge volatility, central bank says
Kazakhstan’s central bank said it sold $144 million to discourage “speculative operations” on the currency market after the tenge slumped to its weakest level on record.
The interventions were aimed at stabilizing the situation on the local market in the absence of “fundamental macroeconomic factors” that could cause the tenge’s volatility, according to a statement on the central bank’s website.
The currency of Central Asia’s biggest energy producer has extended its declines following its steepest tumble on record last month, when policy makers switched to a free-floating exchange rate to boost competitiveness amid falling oil prices. The tenge closed down 1.2 percent at 285.02 versus the dollar on Wednesday. Earlier in the session it slumped as much as 6.1 percent to 299.99, the lowest on record, data compiled by Bloomberg show.
“The volume is not so high, which probably suggests that the move is mostly speculative,” Dmitry Polevoy, the chief Russia economist at ING Bank Eurasia JSC in Moscow. “Anecdotal reports on somewhat higher interest from households might have risen risks for the banking sector stability, so they stepped in.”
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