BAKU, Azerbaijan, May 25. Kazakh foreign exchange market has experienced high volatility due to changes in the risk sentiment of trading participants since the introduction of sanctions against the Russian Federation, the National Bank of Kazakhstan told Trend.
According to the bank, trades on Kazakhstan Stock Exchange (KASE) were held on certain days in the form of a Frankfurt auction, against the background of increasing volatility in global financial markets and in order to prevent destabilization of the situation in the local currency market.
"There was also an increased demand for foreign currency in Kazakhstan. There was a shortage of foreign currency in cash, caused by a break in supply chains in March of this year. The National Bank imported cash foreign currency from abroad in order to meet rush demand for foreign currency in cash," the bank noted.
The bank emphasized that restrictions were introduced on the export of cash foreign currency and monetary instruments in foreign currency from Kazakhstan in an amount exceeding the equivalent of $10,000 (at the exchange rate of the National Bank on the date of export).
These measures have been taken in order to minimize the risks regarding financial stability and reduce the pressure of speculative demand, to ensure control over the excessive export of foreign currency, by decree of the Kazakh President. The situation on the foreign exchange market has been stabilized as a result of the measures taken,” the bank added.
"Current quotes reflect the balance of supply and demand. The National Bank monitors official statements of governments of other states, central banks and financial organizations in real time and assesses the degree of impact of new sanctions on the financial system of Kazakhstan,” the bank said.
“Kazakh National Bank intends to ensure a balance in the foreign exchange market and maintain confidence in tenge (currency of Kazakhstan) from both internal and external market participants," the bank said.
The bank emphasized that in exceptional cases, the National Bank may conduct one-time (single) operations in the local foreign exchange market to smooth out sharp fluctuations in the exchange rate and restore confidence in the market and pricing mechanisms, in order to smooth out market volatility.