Kazakh tenge per US dollar exchange rate forecast
According to the senior analyst of Alpari agency Anna Bodrova, until the end of September, the Kazakh tenge exchange rate will fluctuate within the range of 265-295 tenge per one US dollar, Tengrinews reports citing mln.kz. She did not preclude that these could be sharp spikes in both directions in tenge’s value, since investors still had not adjusted to the new exchange rate reality. The euro rate, according to the expert, will fluctuate between 310 and 350 tenge per one euro.
On August 20, Kazakhstan’s National Bank shifted to inflation targeting and a more flexible exchange rate policy, abandoning a pegged exchange rate band. This was followed by a staggering 36 percent depreciation of the tenge against the U.S. dollar in one day that became a 50 percent depreciation after one month.
The deteriorated situation on the oil markets negatively affected the economy of oil-dependent Kazakhstan. As Bodrova notes, tenge rate is volatile due to the unstable oil prices - oil has been way under 50 dollars per barrel lately.
Now that the Federal Reserve left the interest rates unchanged at the minimum level, investors will look for the new drivers for trading. “With the indicated rebound in the commodity markets, Brent might rise to $50 per barrel. These price movements, however, would be purely speculative,” the expert said.
Meanwhile, the former chairman of the National Bank of Kazakhstan Oraz Zhandosov believes that Kazakhstan’s economy is not large enough to have a fixed national currency rate. "I am not a supporter of a fixed exchange rate for tenge, above all, because we have a small economy. We do not have barriers for trade and capital flows, and we are very much dependent on the export of raw materials, especially crude oil," said the ex-banker during the fifth Kazakhstan Growth Forum in Almaty this Monday, Tengrinews reports citing kursiv.kz.
According to Zhandosov, a national economy can have a fixed rate of the national currency only provided that two factors are in place: large foreign-exchange reserves - their size relative to the size of the economy - like in a number of Arab countries in the Persian Gulf, and the economy protected from trade fluctuations and dependent on the services sector.
"Due to objective factors, it is impossible in the case of Kazakhstan. Therefore, it is better to have a floating exchange rate and thus let the economy partially absorb external shocks," Zhandosov concluded.
By Indira Urazova, editing by Tatyana Kuzmina