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Finance Banking Economy Currency money National Bank EDB

EDB Forecasts Strengthening of the Tenge in 2025

The Eurasian Development Bank (EDB) has projected a strengthening of Kazakhstan’s national currency, the tenge, in 2025. This forecast was presented by Aigul Berdigulova, a senior analyst at the EDB’s Country Analysis Center, during the bank’s macroeconomic outlook for the Eurasian Economic Union (EAEU) member states. Exchange Rate Outlook The tenge’s exchange rate has been under significant pressure, depreciating from 495 KZT per U.S. dollar in mid-November to 523.58 KZT by December 5, according to Kazakhstan’s National Bank. Exchange offices have reported rates as high as 525 KZT per dollar. The National Bank attributes this decline to external factors, such as fluctuating global commodity prices - critical to Kazakhstan’s export economy - and the weakening of the Russian ruble, a key trade partner’s currency. Internal factors, including heightened demand for foreign currency, have further contributed to the tenge’s volatility. To stabilize the market, the National Bank intervened with $1.2 million from the National Fund in November. Despite these challenges, EDB analysts anticipate a rebound in 2024 and beyond. “We believe the current volatility in Kazakhstan’s currency market is temporary,” said Berdigulova. She emphasized that the National Bank and government are employing timely measures, including mandatory sales of 50% of foreign currency earnings by quasi-governmental entities and increased transfers from the National Fund. The EDB forecasts the average annual exchange rate in Kazakhstan to reach 486 KZT per dollar in 2025, a slight depreciation from the projected 466 KZT per dollar in 2024. By 2026-2027, the tenge is expected to stabilize at around 497 KZT per dollar. Inflation and Monetary Policy High inflation remains a concern. The EDB predicts inflation in Kazakhstan will decline to 7.3% by the end of 2025, hindered by rising tariffs for housing and utilities. To manage inflation, the National Bank is likely to maintain a high prime rate, above 15%, through the first quarter of 2025. However, as inflationary pressures ease, the rate may decrease to 11.25% by late 2025. External Influences and Oil Revenues Marina Sobolevskaya, head of the EDB’s Country Analysis Center, acknowledged that the Russian ruble's depreciation would continue to impact the tenge, with the ruble expected to weaken from 92.5 per dollar in 2024 to 104 per dollar in 2025 and 107 per dollar by 2027. On the other hand, Kazakhstan’s currency could gain support from increased oil production, particularly from expanded operations at the Tengiz oil field. Higher exports and foreign currency inflows could mitigate currency fluctuations in the domestic market. Short-Term Recovery The possibility of a short-term recovery for the tenge was also suggested by Murat Temirkhanov, an advisor at Halyk Finance. He attributed recent volatility to a surge in demand for dollars, driven by sanctions-induced ruble depreciation. Temirkhanov argued that the tenge-dollar exchange rate’s sensitivity to the ruble is overstated, given the relatively small share of ruble settlements in Kazakhstan’s foreign trade. Halyk Finance estimates the tenge’s current exchange rate of 525 KZT per dollar is above its fundamental value, which should be closer to 505 KZT per dollar....

Manas Culture Cultural Heritage money National Bank

Kyrgyzstan Unveils Record-Breaking Collector Coin

The National Bank of Kyrgyzstan has unveiled the most expensive collector coin in its history - a gold coin titled “Aikol Manas.” The initiative aims to promote oral folk traditions and preserve the cultural heritage of the Kyrgyz people. The coin was officially released on December 2. The National Bank emphasized the cultural significance of the epic Manas, which holds a central place in Kyrgyz's spiritual life and is recognized as a global masterpiece of oral folk art. The epic narrates the story of the legendary warrior Manas, who, through his courage and leadership, united the Kyrgyz tribes to secure independence and freedom for their native land. The coin's obverse features an intricate depiction of Manas in battle armor astride his horse, Akkula, set against the snowy peaks of the Ala-Too mountains. Above, the inscription “Aikol Manas” is engraved, with details of the gold's purity (Au 999) and weight (15.55g) on the right. At the bottom are the coin’s face value (200 KGS) and the symbol of the Kyrgyz currency. On the reverse, the coat of arms of the Kyrgyz Republic is framed by traditional national ornaments symbolizing Kyrgyz warriors. Along the circumference, the text “National Bank of the Kyrgyz Republic” is engraved, with the year of issue, 2024, displayed at the bottom. The coin is an official means of payment in Kyrgyzstan, packaged in an acrylic capsule within a protective case and accompanied by a certificate of authenticity. Priced at 123,400 KGS ($1,420), it is available for purchase at the National Bank’s cash desks. Since gaining independence, Kyrgyzstan has issued several gold collector coins celebrating its cultural heritage. The first was released in 1995 to honor the 1,000th anniversary of the Manas epic. In 2015, the National Bank introduced the “Snow Leopard” coin, featuring diamond inlays. For the 30th anniversary of independence in 2021, a gold coin with a face value of 100 KGS was issued.

Finance Banking State Budget money National Bank

Kazakhstan’s National Bank Raises Prime Rate to 15.25% Annually

The Monetary Policy Committee of Kazakhstan’s National Bank has raised the prime rate to 15.25% per annum, with an allowable deviation of 1 percentage point. This adjustment comes in response to the sharp weakening of the national currency, the tenge. The decision is grounded in updated forecasts and assessments of inflationary risks. The National Bank cited easing monetary conditions—driven by the tenge's depreciation, declining real interest rates, and heightened inflation expectations—as key factors behind the rate increase. Financial market volatility has further underscored the need for this measure. The National Bank emphasized its commitment to closely monitoring market dynamics and taking additional measures if needed to stabilize inflation. The central goal remains returning inflation, which has risen to 8.5%, to a target of 5%. The next decision on the prime rate is scheduled for January 17, 2025. Role of the Prime Rate The prime rate is a critical economic tool, directly influencing credit costs for banks and shaping inflation trends. Determined through an analysis of economic conditions, it regulates the money market. While a lower prime rate may temporarily weaken the tenge, it can boost production and economic growth in the medium term. Recent Adjustments The latest hike follows a series of previous adjustments. In February 2024, the prime rate was reduced to 14.75%, followed by another decrease to 14.25% in July. The rate was maintained at this level in October before this recent increase. Looking ahead, the National Bank has also published a schedule of rate decisions for 2025, underscoring its transparent approach to monetary policy.

Finance Banking State Budget National Bank GDP

Kyrgyz National Bank Maintains Discount Rate at 9% Amid Stable Inflation and Economic Growth

The National Bank of the Kyrgyz Republic has announced its decision to keep the discount rate steady at 9%, according to a statement published on its official website. The Bank credited its effective monetary policy for maintaining stable inflation. As of November 2024, annual inflation dropped from 7.3% at the start of the year to 5.2%, aligning with the regulator’s targets. Inflationary pressures remained moderate, with slowed price growth in both food and non-food categories. Key drivers of price levels include strong domestic demand and the impact of tariff policy measures. Kyrgyzstan’s economy continues to demonstrate robust growth, primarily driven by expansion in the construction and services sectors. Real GDP grew by 9.6% during the first ten months of 2024, fueled by increased domestic consumption supported by rising household incomes. Higher real wages and a surge in individual remittances have contributed significantly to this growth. Fixed asset investments, largely financed by domestic sources, have also risen. The domestic foreign exchange market has shown resilience, with fluctuations in the national currency attributed to seasonal factors and balanced supply-demand dynamics. The National Bank has conducted $20.75 million in net foreign currency sales since the beginning of the year to prevent sharp exchange rate volatility. The Bank has progressively adjusted its discount rate over the past two years. In November 2022, it was reduced from 14% to 13%, followed by further reductions in 2024: from 13% to 11% in April and then to the current 9% in May. The next review of the discount rate is scheduled for January 27, 2025.

National Bank economic Regulation Finance Government Digitalization Cryptocurrency

Kyrgyz Authorities Unhappy With The Dollar

The Kyrgyz Finance Ministry plans to set aside 20 billion KGS ($230m) to issue digital bonds and treasury bills. Kyrgyz Cabinet Chief Akylbek Japarov has said at a meeting with journalists that according to him, the central bank's monopoly on issuing money is ending. Japarov discussed the role of the U.S. dollar in the country's economy and emphasized that it has become a tool of political pressure. “We send payments, but they are delayed without explanation. Sometimes, the delays last up to three months. This hurts trade. If there is no money, there is no trade. I think a new toolkit will soon appear,” he stated. He said the BRICS organization is already working on alternative payment systems to support trade. Cryptocurrency, and any currency backed by the gold reserves of the countries that use it, can replace the dollar in international trade. “Now everyone who has a gadget can emit cryptocurrency into various cryptocurrencies. In Kyrgyzstan, we will work on this issue and have a crypto exchange,” Japarov noted. He noted that digital bonds and promissory notes issued by the Kyrgyz Finance Ministry will be backed by gold. Corresponding amendments to the legislation are already being submitted to Parliament for consideration. Earlier, the National Bank of Kyrgyzstan also announced the launch of a pilot project for the national digital currency, “digital som,” and the creation of a legal framework for it. The Ministry of Economy and Commerce of Kyrgyzstan also announced the creation of crypto banks that will work with virtual assets. “Given the rapid development of digital technologies and cryptocurrencies, creating a crypto bank represents an urgent need to integrate crypto assets into the country's traditional financial system. Cryptobank will ensure safe, regulated, and convenient interaction of citizens and businesses with cryptocurrencies”, noted the Ministry of Economy.

Finance Legislation Government money National Bank money tranfer

Kyrgyzstan Bans Commissions on Online Transfers

The National Bank of the Kyrgyz Republic (NBRK) has adopted a resolution requiring commercial banks to prohibit commissions on money transfers in the national currency, the som (KGS), within the country. The NBKR said such measures are taken to popularize banking services for the population. “The measure will contribute to ensuring accessibility of banking services for all segments of the population and accelerate the introduction of digital technologies in the banking sector,” the bank said. The NBKR resolution will be in force until the end of 2025. The country's authorities have been popularizing non-cash payments for years. President Sadyr Japarov has stated that such payments would bring the economy out of the shadows. “The development of cashless payments is a step towards modernizing our economy, strengthening financial security, and increasing financial inclusion. We must make the payment process so convenient and simple that even those who are used to cash could not resist the transition to new technologies,” said the head of the Cabinet, Akylbek Japarov, at a government meeting.