Tenge Likely to Stay Between 510–520 per Dollar in May, Analysts Say

According to April results, the tenge weakened by 1.6%. Halyk Finance analysts commented on the situation, Orda.kz reports.

As Aidos Taybekuly, chief analyst at Halyk Finance, explains in his commentary, the tenge came under pressure in April from low oil prices and foreign investors selling Kazakh securities. That month, the National Bank sold $1.131 billion, including $968 million from the National Fund.

At the same time, the regulator continued gold purchases as part of its mirroring policy, buying 213 billion tenge worth. The National Bank also purchased another $250 million for the ENPF pension fund.

The analyst notes that Kazakhstan’s financial authorities depend heavily on the National Fund’s oil revenues. In May, they plan to sell about $1 billion from reserves, significantly above the average for the previous months.

It is not clear from the information from the National Bank what part of this amount will go to transfers from the National Fund to the budget, and what part will go to the purchase of Samruq-Qazyna National Welfare Fund bonds for infrastructure projects. In any case, such rates mean accelerated use of the National Fund, similar to last year,says Aidos Taybekuly. 

Last year, experts warned that Kazakhstan should reduce its reliance on the National Fund. Despite these warnings, the fund shrank by over 5.7 trillion tenge in 2024. The National Bank has admitted that constant National Fund transfers drive inflation. So far, however, the regulator has not offered an alternative way to fill the budget quickly.

Halyk Finance’s analytical center also points out that the National Bank will continue buying foreign currency for the ENPF in May, although no specific amounts have been disclosed.

The absence of a clear amount for the purchase of currency for the ENPF may indicate a departure from the principle of market neutrality, which contradicts what was stated,emphasizes Aidos Taybekuly. 

Based on these factors, the forecast is as follows:

• The National Bank will sell approximately $1.164 billion in May, more than in April
• Oil prices are expected to stay low this month
• By the end of May, the tenge-dollar rate is projected to range between 510 and 520 tenge
• Analysts do not anticipate sharp fluctuations in the exchange rate in May

Currently, the official dollar exchange rate set by the National Bank is 516.16 tenge, while the KASE trading rate on May 2 stands at 516.20 tenge per dollar.

In April, the dollar rate climbed above 520 tenge thrice, dropped sharply at month’s end, and then rose again.

Original Author: Nikita Drobny