Kazakh tenge real exchange rate down by 24.7% in 201513 november 2015, 17:19
In the first 10 months of 2015, Kazakhstani tenge real exchange rate has fallen by 24.7 percent against the currencies of its major trading partners, Tengrinews reports citing the National Bank of Kazakhstan. From January 2014 to October 2015 tenge weakened by 20 percent against trading partners’ currencies. The calculations were based on the index of the real effective exchange rate against the currencies of 34 countries.
On August 20, the Kazakh government and the National Bank opted for a free floating exchange rate. Thus in 2015, the Kazakh tenge has weakened against the Russian ruble by 27.6 percent. Due to the significant weakening of the Russian ruble in 2014, the Kazakh tenge from the beginning of 2014 to October 2015 virtually reached the purchasing power parity against the ruble.
Source: National Bank of Kazakhstan
According to the National Bank’s report on Kazakhstan’s trade balance in 2014 and 2015, the positive trade balance decreased in 2015 compared to 2014. The positive trade balance of the first 9 months of 2015 amounted to 10.7 billion dollars - a decrease of 65 percent compared to 30.6 billion dollars during the first 9 months of 2014. Exports fell from 62.7 to 30.6 billion dollars, and imports decreased from 32.1 to 25.7 billion dollars.
In addition, in 2015 Kazakhstan has a negative current account balance, which is a logical consequence of the tenge being overvalued before its depreciation on August 20 this year. The current account deficit of the first 9 months of 2015 amounted to 4 billion US dollars, compared to a surplus of 6.1 billion US dollars in the first 9 months of 2014. The negative balance of income amounted to 10.9 billion compared to 19.9 billion dollars in the first 9 months of 2014. "The decrease of the current account balance was a result of declining revenues of exporters, and consequently, non-residents' income from direct investments,” the National Bank explained.
The negative balance of international services totaled 3.8 billion dollars. Net capital inflows in Kazakhstan’s financial account (excluding errors and omissions) amounted to 8.4 billion US dollars, with the net inflow of direct investment transactions in the first 9 months of 2015 amounting to 3.6 billion US dollars.
By Indira Urazova