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Sliding Ruble hurts Kazakhstan's exports to Russia 31 октября 2014, 19:35

The continuing fall of the ruble exchange rate against dollar is taking its toll on the exports Kazakhstan is supplying to Russia.
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Information board with the ruble exchange rate in Moscow ©RIA Novosti Information board with the ruble exchange rate in Moscow ©RIA Novosti

The continuing ruble crisis has an adverse effect on Kazakhstani exports to Russia, Tengrinews reports citing Raimbek Batalov, representative of the Board of Directors of Raimbek Group.

Speaking at the press conference of the fourth Central Asia Trade Forum, Batalov declared that the situation in general was bad.

"In any case, prices are calculated in currency equivalents. It is clear that the change of the currency rate negatively affects motivation and undermines interest to selling Kazakhstani goods to Russia. For us it is important to have  stable exchange rate," he said.

Since the supply of goods was year-round, the prices fluctuated along with the exchange rate, which Batalov called very bad for business. In fact, Russia is Kazakhstan's largest trade partner with their mutual trade worth $23.5 billion last year and Russian being responsible for 36% of Kazakhstan's trade turnover.

"Any production requires making stocks of raw materials. This is our common weakness - that the raw materials we use are mostly imported. We are tied to foreign currency. Here, everything is interconnected, and the fluctuations of the ruble against the dollar negatively affect us today and might continue doing so in the future," the speaker explained.

A note of optimism was added by the regional director of USAID Mission in Central Asia Jonathan Addleton, who said that the economy of Central Asia, which includes Kazakhstan, would continue growing nonetheless.

"With regards to the economic slowdown, the fact is that different countries have different growth rates. (…) In Central Asia the development is still in progress. Even if there is a slowdown in growth, we need long-term relationships between nations. Trade will be carried out under any economic circumstances, and the economy of Central Asia will only continue growing," Addleton said.

The ruble keeps beating negative records one after another. The dollar is currently sold for 42.96 rubles, a critical mark reached partly due to the fear that the Western sanctions will not be canceled in the near future. Experts believe that the pressure on the ruble will persist, with panic on the market driving the Russian currency even lower.

Reporting by Azhar Ashirova, writing by Dinara Urazova

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