Devaluation may create demand for 20,000 tenge bills in Kazakhstan 13 февраля 2014, 20:33
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A 20,000 tenge bill. ©tengrinews.kz
The climbing of dollar exchange rate might create a demand for the long awaited release of 20,000 tenge bills in Kazakhstan, Tengrinews reports citing an opinion of the Director of the Agency for Investment Profitability Research Yerlan Khasenbekov.
"According to the governor of the National Bank, the 20-thousand tenge bills have already been printed," he reminded, adding that since the tenge was devalued, the release of this large-face-value bill would not spur much panic among people.
"Since the exchange rate grew to 185 tenge per $1 it is natural to expect the inflation to spike. The ministry of Finance and Budget Planning of Kazakhstan has already said that the annual inflation should be expected within the range of 6-8%. The prices will grow significantly, then allowances, pensions and salaries will be adjusted. This means people will have more money," the expert thinks.
The director of the Analysis Department of Asyl Invest Company Aivar Baikenov also believes that now is a good time to release the 20-thousand tenge bills in circulation. "This will not rise any fears in people now," he said. "People were cautious about the possible release of the 20-thousand tenge notes because it would signal a devaluation was coming. But now with the meltdown in place, these notes can be safely put in circulation. But there is a possibility that the National Bank has some internal issues related to this bill," Baikenov said.
According to the expert, putting the bill in circulation won't have neither a positive nor a negative effect.
By Azhar Ashirova