Central Bank Governor on the tenge and growing demand for the US Dollar 08 августа 2012, 06:10
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Photo courtesy of newskaz.ru
In an interview for Russia’s http://www.1prime.ru August 7, 2012, Kazakhstan Central Bank Governor Gregory Marchenko explained the reasons behind the growing demand for the US Dollar among common people in Kazakhstan.
“Late May the global oil price fell from $120 to $93 per barrel, which entailed weakening of the Russian rouble (…) its 15% devaluation was noticeable immediately. Speculations were sparked that Kazakhstan would follow Russia’s example. These speculations spurred demand for foreign currencies. However, the current exchange rate of 150.2 tenge for USD1 is within the range [145-151 tenge for USD1] set by the National Bank following the devaluation in February 2009. For the recent three years the tenge volatility has only been +-2%.
When commenting on currency interventions, he said that in February and May the National Bank bought a bit over $ 2 billion, selling $1.7 billion in June and July. Currency intervention, also known as exchange rate intervention or foreign exchange market intervention, is the purchase or sale of currency on the exchange market by the monetary authority, i.e. the central bank, in order to influence the value of the home currency on the foreign exchange market.
He elaborated that the National Bank’s reserves stand at $29.5 billion, with the assets of the National Oil Fund totaling $53 billion.
The National Fund of Kazakhstan was created in 2000 as a stabilization fund that accumulates windfall revenues from oil sales and ensures the economy of Kazakhstan will be stable against the price swings of oil. The assets of the National Fund assets are monitored by the National Bank.
In his latest State of the Nation Address [January 27], President Nazarbayev suggested the National Oil Fund money be used in the form of loans to the national economy rather than kept with foreign banks.
The National Oil Fund’ average annual earning capacity stands at 4.51%, Gregory Marchenko said July 25 during the online conference arranged by Profinance.kz.
“Things are up for the National Bank. The Fund’s assets in 2011 and the H1 2012 grew by $20.8 billion; the average annual earning capacity stands at 4.51%. The Fund’s investment income from its foundation to 2011 made up $6.2 billion”, Mr. Marchenko said at that time.