Kazakh cur­rency falls to his­toric low vs dol­lar

Kuwait Times - - BUSINESS -

AS­TANA: En­ergy-rich Kaza­khstan’s na­tional tenge cur­rency plunged to a record low against the dol­lar Fri­day as the Cen­tral Asian coun­try strug­gles with low oil prices and the im­pact of Rus­sia’s eco­nomic cri­sis. The tenge dipped to a his­toric 310 ver­sus the dol­lar fol­low­ing evening trad­ing on the Kazakh stock ex­change, down from 185 against the dol­lar in Au­gust when the na­tional bank aban­doned a long-term cur­rency cor­ri­dor for a free float. Of­fi­cials in the ex-Soviet coun­try said the tenge’s alarm­ing slide was dis­rupt­ing the prepa­ra­tion of the 2016-18 bud­get. “Many peo­ple thought that ad­just­ing the ex­change rate would have a pos­i­tive im­pact. There are ad­van­tages, but there are more dis­ad­van­tages,” said deputy fi­nance min­is­ter Lena Kar­maz­ina at a ses­sion of the Kazakh leg­is­la­ture’s lower house.

“We have a lot of ex­penses tied to the ex­change rate with for­eign cur­ren­cies: in­ter­na­tional obli­ga­tions, debt ser­vic­ing... [im­ported] medicines, defence ca­pa­bil­i­ties and se­cu­rity.”

On Thurs­day, the tenge dipped 5 per­cent against the dol­lar as the cen­tral bank vowed to re­duce its pe­ri­odic mar­ket in­ter­ven­tions, while prospects for the coun­try’s key crude oil ex­ports re­mained gloomy. At the be­gin­ning of the week the gov­ern­ment dis­missed the na­tional bank’s gover­nor Kairat Ke­lim­be­tov, re­plac­ing him with 39-year-old Dani­yar Ak­i­shev. Kaza­khstan’s 75-year-old au­to­crat Pres­i­dent Nur­sul­tan Nazarbayev promised ear­lier this year that low oil prices and eco­nomic pain in neigh­bour­ing Rus­sia would not lead to cuts in so­cial spend­ing. Kaza­khstan recorded im­pres­sive GDP growth in the decade af­ter the turn of the mil­len­nium and is con­sid­ered an eco­nomic leader in the de­pressed Cen­tral Asian re­gion. — AFP

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