Analysts: US-Russia Talks Could Boost Tenge

The Kazakhstani tenge may strengthen against the dollar as a result of upcoming negotiations between Russia and the United States on resolving the Russia-Ukraine conflict, according to Western financial analysts, Orda.kz reports.

As Bloomberg notes, investors are closely watching the Trump administration’s recent efforts to improve ties with Russia. Many are already seeking opportunities to re-enter the Russian market.

Currently, hundreds of billions of dollars in Russian assets remain frozen in the U.S.

Shares of major Russian corporations like Rusal and international banks with ongoing operations in Russia have already seen price increases.

Western investors are also exploring alternative trade routes with Russia, including through third countries like Kazakhstan. The recent thaw in U.S.-Russia relations has already had a noticeable impact on the Kazakhstani currency.

Kazakhstan, a major Russian trading partner, has seen the tenge strengthen about 4% this month, one of the biggest increases among currencies around the world,  Bloomberg reports.

While financial analysts caution that lifting Western sanctions on Russia could take years — especially given the European Union’s firm stance — investors are already searching for ways to gain early access to a potentially reopening market. Countries with strong trade ties to Russia, such as the UAE and Kazakhstan, are seen as key players in this shift.

For now, trading Russian-linked assets remains a gray area, but London-based brokers are already receiving offers from banks seeking to sell pre-war ruble bonds. Meanwhile, investor interest in tenge-denominated assets is rising.

To Kieran Curtis, a fixed-income fund manager at Abrdn, the Kazakh tenge is a relatively cheap trade that will benefit from Ukraine peace talks. He's skeptical that the US would lift sanctions, but given Trump's posturing to Russia, it's not out of the question, Bloomberg writes.

If U.S.-Russia negotiations lead to even partial sanctions relief, Kazakhstan could reap significant benefits — at least in the early stages of economic normalization. The country may find itself in a lucrative position as a trade intermediary, helping Western investors cautiously re-enter the Russian market.

Meanwhile, some Kazakhstan-based companies have been hit by Western sanctions for alleged ties to Russia. One such firm, Kazstanex, has now been blacklisted for the third time.

Original Author: Nikita Drobny