Tenge devaluation must not affect Kazakhstan people negatively: Nazarbayev 14 февраля 2014, 20:45
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Kazakhstan's President Nursultan Nazarbayev meets with Prime-Minister Serik Alhmetov and the Head of National Bank Kairat Kelimbetov. Photo courtesy of akorda.kz
The President of Kazakhstan Nursultan Nazarbayev has had a meeting with the Prime-Minister of Kazakhstan Serik Akhmetov and the Governor of National Bank of Kazakhstan Kairat Kelimbetov, Tengrinews reports citing the presidential press-service.
"The decision to devalue the Kazakh currency mustn't have a negative effect on the people of Kazakhstan. It is important to monitor the situation and prevent any manipulation of prices or exchange speculation," Nazarbayev instructed.
He urged the official to explain the reasons of the devaluation to the people to make sure they understand that there is not cause to worry.
"It is a purely financial measure called to support our major companies that employ 10-40 thousands people each. Kazakhstan’s economy will get some additional profit and this will spur its further growth. The decision was made in pursuit of this goal," Nursulatn Nazarbayev said.
"We have achieved good results, but we were loosing steam in 2012-2013, because currencies of other developing countries were weakening against the US dollar. (...) There is also some uncertainty about the Russian ruble," Kelimbetov said.
“Import is growing faster than export in Kazakhstan. We reserved to adjusting the exchange rate to reduce the pace of the import growth. We believe that the 20% adjustment of the exchange rate to bring it to 185 tenge per $1 give or take 3 tenge is the very exchange rate - balanced and competitive - that Kazakhstan's economy needs in the short- and mid-term,” he elaborated.
"We spent $2.7 billion from the national reserve in June-August (2013) and $2.2 billion in January (2014) alone to keep the tenge exchange rate stable. With such a course in place things could have gone out of control. Opinions of the adjustments vary now. Many expect all the price to double or even triple with the 20% adjustment of the exchange rate. That is why we have set a priority goal of retaining the inflation rate within 6-8%. I believe it is a realistic goal," the National Bank Governor Kairat Kelimbetov said.
On February 11, 2014, the governor of the National Bank of Kazakhstan Kairat Kelimbetov announced a one step devaluation of tenge away from the previous rate of 155 tenge per dollar to the new weighted average of 185 tenge per dollar. “The National Bank expects that the new exchange rate will be at around 185 tenge per US Dollar,” Kairat Kelimbetov said adding that the central bank will be supporting the nation currency and keeping it within the range of 182-188 tenge.
For many Kazakshtanis the decision of the National Bank came like a thunderbolt. On The Black Tuesday, as many Kazakhstanis call this day, large malls and online shopping websites were closed along with a number of exchange offices. The dollar was sold and bought for more than 200 tenge.