Tenge exchange rate adjustment possible if oil prices go below $50: Kazakh central bank governor Kelimbetov

Photo courtesy of lsm.kz

Governor of the National Bank of Kazakhstan Kairat Kelimbetov has declared that a smooth adjustment, i.e. gradual devaluation, of the tenge exchange rate should be expected in case the global oil prices keep falling, Tengrinews reports from the press briefing at the Central Communications Service quarters today.

"If the price of oil will be lower than $50 and the more negative scenarios materialize, in this case we assume that a smooth change of the exchange rate is possible by widening the exchange rate corridor. Again, we are talking about the average price and a lingering decline in oil prices," Kelimbetov said.

He stressed that there were no preconditions for a devaluation at that point. "To date, there are no such macroeconomic preconditions, and the exchange rate corridor we are keeping is enough for us to maintain (the tenge) where it now is - at around 185 tenge per 1 dollar," Kelimbetov said.

Governor of the National Bank of Kazakhstan Kairat Kelimbetov has declared that a smooth adjustment, i.e. gradual devaluation, of the tenge exchange rate should be expected in case the global oil prices keep falling, Tengrinews reports from the press briefing at the Central Communications Service quarters today.

"If the price of oil will be lower than $50 and the more negative scenarios materialize, in this case we assume that a smooth change of the exchange rate is possible by widening the exchange rate corridor. Again, we are talking about the average price and a lingering decline in oil prices," Kelimbetov said.

He stressed that there were no preconditions for a devaluation at that point. "To date, there are no such macroeconomic preconditions, and the exchange rate corridor we are keeping is enough for us to maintain (the tenge) where it now is - at around 185 tenge per 1 dollar," Kelimbetov said.

Kazakhstan's national currency - the tenge - is maintained within the corridor of 185 tenge per dollar +3/-15 tenge.

Yesterday, after a government meeting in Akorda, Kelimbetov also declared that there would be no one-step devaluation in Kazakhstan. President of the country Nursultan Nazarbayev also urged the Kazakhstanis not to give in to devaluation fears.

So much reassuring is being made, because the devaluation expectations have been high in Kazakhstan over the past year peaking in February. The oil-driven Central Asian economy experienced a 22% devaluation of its national currency - the tenge - in February 2009 and then a one-step 19% devaluation of its currency last year, also in February.

Reporting by Assemgul Kassenova, writing by Dinara Urazova, editing by Tatyana Kuzmina

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