ALMATY (TCA) — Kazakhstan’s national currency, the tenge, has reached a new low against the US dollar.
In the morning of January 8, the tenge rate on the Kazakhstan Stock Exchange (KASE) reached 351.85 tenges per $1, which is the lowest rate for the currency since Kazakhstan’s government and central bank free floated the tenge in August 2015.
The tenge fell against the background of lowering oil prices and devaluation of the Chinese yuan.
Late in December, Kazakhstan’s National Bank Chairman Daniyar Akishev said that the tenge rate to the US dollar would remain at its current level should the price of Brent oil remain in the range between $30 and $40 per barrel.
Since Kazakhstan’s Government and National Bank free floated the tenge on August 20, 2015, the national currency had devalued almost two-fold (from 188 tenges per $1 on August 19 to 349 tenges per $1 on December 22, 2015).
Kazakhstan President Nursultan Nazarbayev earlier said that the country had no other choice: free floating tenge will help restore the competitiveness of the Kazakh economy and preserve the country’s forex reserves.
National Bank Chairman Akishev said that the National Bank sold $22 billion on the domestic currency market in 2014 and $17.4 billion in January-October 2015 to support the tenge rate.
Last month the National Bank said it was participating in the domestic currency market with the purpose to smooth short-term fluctuations of the tenge rate but did not oppose the effects of fundamental factors determining the demand and supply of foreign currency.
The National Bank said the exchange rate of the tenge is fixed under the influence of factors determined by the price dynamics on international financial and commodity markets and the demand for foreign currency in the domestic market.