Central Bank Governor on situations in Russia and Kazakhstan10 november 2014, 15:17
The current situation around Russia’s rouble is different from that around the tenge, Kazakhstan’s national currency, a Tengrinews.kz journalist reports, citing Kairat Kelimbetov, the country’s Central Bank Governor, as saying at the Financing Growth in Kazakhstan forum held recently in Almaty.
According to him, all that is happening to the rouble is not necessarily applicable to the tenge. “Russia has faced sanctions, has introduced certain sanctions itself; it has no access to the global finance and is now transiting to inflation targeting (…) the free floating of the rouble was introduced 2 months earlier than planned”, Mr. Kelimbetov said.
The banker emphasized that the current situation in the Kazakhstan’s economy is absolutely different. “We enjoy a free access to the international markets (…) the Government has issued sovereign bonds worth $2.5 billion (…)”, he said.
He elaborated that the risks the National Bank had foreseen while depreciating the tenge back in February are now transforming into reality. “As compared to the previous crisis [of 2007], we as a regulator have become smarter”.
“Back in February the National Bank had to resort to a 20% currency devaluation to be ready for further trials; back then it was obvious for us that the relations between Russia and Ukraine would keep on deteriorating, and that the economic development of both China and the EU would slow down. It was pretty obvious that the oil prices would fall, and we needed to ensure a safety cushion through devaluing the currency”, he said.
According to him, the currency devaluation was a result of, among other things, an ineffective monetary policy pursued back in 2012-2013, when the Bank’s international reserves were employed to rectify the situation. “Back in 2011 the international reserves stood at $37 billion, whereas as of the end of last year the figure made up $23 billion”, he said.
At the same time, the government’s overall reserves have doubled for the recent years. “Before the previous crisis [of 2007] the government’s combined reserves totaled $50 billion, with the figure growing to over $100 billion by now”, he elaborated.
“Kazakhstan is ready for whatever might happen in the future; we are ready for new trials; the most important thing is that we are not only ready to tackle the issues, but also to work further to join the top 10 developed nations of the world”.