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Tenge devaluation cannot be ruled out in Kazakhstan: expert10 декабря 2014, 00:11

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Amid the falling oil prices and a general economic slowdown, the National Bank of Kazakhstan manages to maintain the tenge exchange rate. However, the probability of devaluation cannot be ruled out, Tengrinews correspondent reports citing a senior analyst of Alpari company Anna Bodrova.

According to her, over the past week the tenge lost 0.29 percent against the dollar.

"The adjustment is minor. For comparison, the price of Brent oil has fallen by seven percent over the same period. Obviously, the National Bank of Kazakhstan gradually moves the tenge exchange rate to reduce the pressure from commodity prices. The connection here is a direct one: the pegged tenge exchange rate reduces the revenues into the state budget," Bodrova explained.

The analyst added that the primary goal at this point is to maintain flexibility but not to miss the moment when the price of oil is at its critical low. "This is why the National Bank is intervening at the currency market," she said.

Bodrova said there was a probability of devaluation of the tenge, just as there was of any currency of a developing economy.

"Kazakhstan has its own structural problems - vulnerable labor market, for example, where now there is a gradual decline in real incomes of the population. Thus, the threat of devaluation cannot be blamed only on external factors. At the same time, I stress that the long-term devaluation of the ruble is not critical in this case: the weakening of the Russian currency is many times greater than the similar movement in the tenge," she said.

She stressed there were no prerequisites for a new devaluation of the tenge at that point. Nevertheless, she noted that a one step devaluation of the tenge by 15-20 percent can be undertaken in case the situation deteriorates both inside and outside the economy of Kazakhstan.

"Then risking international reserves will no longer make any sense, and the National Bank will lower the rate of the tenge in one take," she said.

Making currency forecasts the analyst said that the dollar would spend a week within the range of 181.40-181.90 tenge, the euro would be traded in the range of 223.85-225.10 tenge, and the ruble exchange rate would linger within the corridor of 3.3-3.65 tenge.

Reporting by Azhar Ashirova, writing by Dinara Urazova

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