Tenge and Ruble: Currency Twins?

Kazakhstan’s Vice Minister of National Economy, Arman Kasenov, has explained why the tenge often mirrors the ruble’s movements against the dollar. According to him, this connection has persisted for over twenty years, Orda.kz reports.

The key reason lies in the structural similarities between the economies of Kazakhstan and Russia.

Both countries have significant mining industries, each contributing about 9–10% to GDP.

Additionally, their exports are heavily reliant on oil, making both currencies sensitive to global oil price fluctuations.

Our currency reacts similarly to the Russian ruble because our export structures are nearly identical. Exports and imports primarily influence exchange rates, and since we depend on the same factors — especially oil prices — the tenge tends to strengthen or weaken in sync with the ruble, Kasenov explained.

Another contributing factor is inflation. The Vice Minister noted that Kazakhstan and Russia have roughly the same inflation rates, which helps maintain relative parity between their currencies.

In Türkiye, inflation is much higher, while in Japan, it’s significantly lower. But in Russia and Kazakhstan, inflation levels are similar, which supports the stability of our currencies in relation to each other,he added.

However, beyond macroeconomic factors, market expectations play a crucial role. Kasenov pointed out that exchange rates are not driven by economics alone but also by public sentiment.

He cited an example from late November 2024, when the Russian ruble depreciated to 120 per dollar. Expecting a parallel decline in the tenge, Kazakhstanis rushed to buy dollars.

When the ruble fell, Kazakhs started purchasing U.S. dollars en masse, multiplying the ruble’s exchange rate by five and bracing for a similar tenge devaluation. As a result, dollar demand in Kazakhstan soared past a billion dollars in just two days — far exceeding the usual daily trading volume of 150–200 million. This surge in demand inevitably pushed the dollar’s price up,   he explained.

Original Author: Zhadra Zhulmukhametova