Central Bank Governor on why he assured there would be no currency devaluations prior to actual devaluation

Central Bank Governor Kairat Kelimbetov answered journalists’ question if he was ready to keep governing the Central Bank if another currency devaluation happened [despite his assurances that no currency devaluation was expected], a Tengrinews.kz journalist reports.

Prior to the 20% currency devaluation back in February Mr. Kelimbetov assured the country’s population there were no such expectations. “If there is another currency devaluation despite your assurances, will you still be holding the position of the Central Bank Governor?”, one of the journalists asked Mr. Kelimbetov.

“Back in February the Central Bank faced harsh criticism. Some said the devaluation had been too tangible and unexpected. Others required for even tougher measures. Now some are requiring a second wave of the currency devaluation. The Central Bank is fully aware of its responsibility for the policy it has been pursuing with due consideration of the global economic situation, the country’s balance of payments, the FX market. I believe the Central Bank has been providing right solutions to modern challenges”, he said when answering the question.

He once again reminded about the reasons why the Central Bank had been refuting possibilities of a currency devaluation before it actually happened.

“In October 2013 we told there were no fundamental factors to have a substantial effect on the tenge exchange rate. There were no sanctions against Russia back then, the rouble wasn’t weakened so much. Oil prices stood at $115 per barrel and nobody could foresee that the oil price would hit $80 by July”, he said.

“But in February, when the Central Bank was considering mid-term scenarios for 2014-2016, all the geopolitical tension, weakening of the Russian national currency, further slowdown of both the EU and China’s economies were clearly saying that currency exchange rate correction should envisage a certain safety margin. We provided this safety margin. Further developments in the global economy don’t depend on the Central Bank. That is my answer to the question if all the decisions taken had been right”, he said.