National Bank Announced Measures to Stabilize Tenge

The National Bank is preparing an order, and the government is preparing a resolution to oblige quasi-public sector entities to sell half of their foreign exchange earnings. This rule, which was in effect until 2023, is being reintroduced to support the tenge exchange rate, Orda.kz reports.

The National Bank has stated that several factors led to the weakening of the tenge: the global strengthening of the dollar (+5.5% to the DXY dollar index since the end of September), pessimistic sentiments in the oil market due to low demand, and the expected growth of supplies from OPEC+, as well as the growth of demand for foreign currency in the domestic market. 

The growing budget and quasi-public sector expenditures on investment projects also contributed, as they have accelerated the growth of imports.

To balance the foreign exchange market, the National Bank has decided to again oblige quasi-public sector companies to sell half of their foreign exchange earnings.

The regulation on the mandatory sale of 50% of foreign exchange earnings by entities of the quasi-public sector will be resumed. The corresponding resolution of the Government of the Republic of Kazakhstan and the order of the National Bank have been prepared and will be adopted in the coming days. Previously, this rule was in effect until August 2023, when it was suspended due to changed macroeconomic conditions,  Aliya Moldabekova , Deputy Chairperson of the National Bank, commented.

The National Bank believes this norm will become an effective tool to help smooth out economic shocks.

The national currency has been approaching the 500 mark per dollar; some exchangers have set their prices at 500 tenge per dollar. 

Original Author: Nikita Drobny