PM Massimov on how Kazakhstan avoided default

Today in Astana the country’s Government briefed journalists on what measures would be taken following the decision to renounce the fixed currency exchange rate.

 “If the Government and the National Bank hadn’t been taking any measures and had merely been passive observers relying on the National Oil Fund [accumulating windfall oil revenues], Kazakhstan would end up with a huge default. However, the measures being currently taken, including the recent shift to inflation targeting, measures to keep the national reserves intact, austerity measures will enable Kazakhstan to ensure a greater economic stability. I am confident the nation has all the prerequisites to handle the hardships and come out of the crisis with renewed strengths», the PM said when addressing to the journalists.

The Prime Minister informed that the country’s regional governors had been instructed to prevent price hikes for basic necessities in the nearest time. “We will make sure there will be no sharp price hikes for essentials. In the longer run, I believe prices should be set by the market forces”, he summed up.

Following the decision to renounce the fixed currency exchange rate some members of the country’s Government, including the PM, as well as the National Bank Governor had a press briefing.

From August 20 the National Bank and the Government have decided to implement a new monetary policy based on inflation targeting and to renounce the earlier practiced currency corridor, the country’s PM Karim Massimov said in the government sitting today.

He emphasized the exchange rate for the tenge would depend on the demand and supply in the FX market driven by both internal and external economic factors.