National Bank Head Comments on Base Rate Increase

The National Bank Chair Timur Suleimenov answered whether the increase in the base rate was a reaction to speculative demand for currency, Orda.kz reports.

I am familiar with this opinion. I want to emphasize that yesterday we had a record trading volume on the Kazakhstan Currency Exchange - 770 million dollars in one day. The day before yesterday - 560 million. If we call everyone who trades on the exchange speculators, then, probably, we can agree with this. But no speculator can handle a billion dollars in a day,
Suleimenov stated.

Suleimenov said the market's activity is connected with the search for a new equilibrium exchange rate for the tenge, not individuals' actions.

The market as a whole is looking for a new level. This is not speculation, this is the work of all participants - they evaluate current conditions and react to changes,
 noted the National Bank Head.

He added that the current market changes are caused by objective factors occurring in the country and abroad.

The National Bank Head also commented on whether the regulator would take measures to shore up the tenge at a specific exchange rate.

We do not target any exchange rate. The market itself determines it based on the balance of supply and demand. The National Bank acts as a market participant: we implement part of the transfers from the National Fund, sometimes we buy currency. But we do not have a goal to achieve specific exchange rates - be it 500, 490 or 510 tenge per dollar, Suleimenov stated.

He said interventions are carried out solely to stabilize the situation.

We are intervening not because we want to, but because it is necessary to calm the market. In the last 10 days, there has been a great demand for liquidity for entities engaged in foreign economic activity, and there was practically no supply of dollars on the market. That is why we intervened. Suleimenov noted. 

Interventions have been halted.

The rate is currently formed solely under the influence of market factors. If non-fundamental reasons cause no sharp changes or speculative jumps, the National Bank does not plan to intervene,

Original Author: Artem Volkov Second Article