Volatility of the Russian rouble is not reflected on the Kazakh tenge

Fluctuations of the Russian rouble’s exchange rate will not be reflected on the tenge [Kazakhstan national currency], KazTag Agency reports, citing the country’s Central Bank Governor Gregory Marchenko as saying. “Unfortunately, many journalists, so-called analysts, experts and some of the public at large believe that the relatively significant fluctuations of the Russian rouble are to be reflected on the Kazakh tenge. However, both last year and in May and early June other CIS member states that also hinge on external markets – countries like Azerbaijan, Kazakhstan and Ukraine – faced no tangible fluctuations of their respective currencies against the backdrop of the Russian rouble’s fluctuations. There are no internal factors [in Kazakhstan] for the exchange rate fluctuations; the country’s economy is on the rise”, Mr. Marchenko said at a press-conference June 7. “As for the second factor that could affect the tenge exchange rate – dropping oil prices (…) surely, for oil exporters, $125 per barrel is more favorable than $99; however, Kazakhstan may do pretty well with the oil prices standing in the range of $95-100 per barrel. If the oil prices are stabilized at the current level, there is nothing to be afraid of. Some time ago the situation at the global oil market was extremely favorable for Kazakh oil exporters; currently is still reasonably favorable”, he said. According to Mr. Marchenko, “even $85 per barrel is quite neutral for Kazakhstan (…) at the moment the price is $99.2 per barrel, which means everything is just OK”. At the same time the Central Bank Governor emphasized that although Kazakhstan and Russia are parts of the Customs Union and the Common Economic Space, “the nations have no concerted monetary policy in terms of currency exchange”. “The Central Bank of Russia believes that relatively high volatility of the Russian rouble is right for the national economy at the current stage. In the last three years the currency volatility in Russia has been at around 20%, whereas in Kazakhstan the volatility indicator has been 2%. The Kazakh Central Bank is not ready to change its policy. We do believe the stable currency exchange rate is beneficial for the economy (…) There is no reason to implement Russia’s practices in Kazakhstan”. The Kazakh Central Bank has no plans of abandoning the stable currency path. “However, we don’t introduce any restrictions. We have renounced currency corridors. We don’t say the exchange rate should stand at KZT 148 per USD 1. We move along with the market. We try to prevent rumors from exerting unnecessary impact on the exchange rate”.