BAKU, Azerbaijan, Feb. 9
Trend:
The situation in the exchange market of Kazakhstan after the unprecedented events in early January has completely normalized, Aliya Moldabekova, deputy chairperson of the country’s National Bank (NBK), said, Trend reports citing the bank.
After an almost week-long absence of trading, an accumulated demand for foreign currency was formed, and in the conditions of a limited number of sellers, on January 12 and 13, the National Bank carried out foreign exchange interventions. Their volume amounted to $240 million. Afterwards, the bank’s intervention wasn’t required for a month.
The tenge was mainly supported by the positive dynamics on the oil market. However, despite the rise in oil prices, in January the tenge depreciated by 0.4 percent to make up 433.52 KZT against $1, reflecting the global strengthening of the US dollar, the weakening of the currencies of major trading partners and the continued outflow of non-residents from the debt market of Kazakhstan.
Last month, investments of non-residents in the government securities of Kazakhstan decreased from 595.5 billion tenge ($1.39) to 543.8 billion tenge ($1.27) in monthly terms. As a result, the share of foreign participants in the securities lowered from 4.26 percent to 4.04 percent.
The dynamics of the Russian ruble, currency of Kazakhstan's main trading partner, was negative. The ruble weakened by 2.85 percent over the month, and on some days exceeded the mark of 80 rubles, for the first time since November 2020.
The volume of currency supply from the National Fund for transfers to the budget in January amounted to $696 million, and the sale from the companies of the quasi-public sector - $346.5 million. An increase of the base rate by the National Bank made it possible to maintain the relative attractiveness of tenge instruments, providing additional support to the tenge.
Since the beginning of February, tenge has strengthened by 1.3 percent to the level of 427.95 KZT against $1. The main factors behind the positive dynamics of the national currency are the high price of oil, which is above $90-91 per barrel, and the strengthening of the Russian ruble (by three percent since the beginning of the month).
The national currency is also supported by a decrease in demand for foreign currency on the part of legal entities after active build-up of positions from November through December, as well as a favorable seasonal factor before exporters' tax payments to the state budget.
Kazakhstan's government announced late Jan. 4 that it was restoring some price caps on liquefied petroleum gas after the rare protests reached Almaty following a sharp rise in the price of the fuel at the start of the year.
Many Kazakhs have converted their cars to run on LPG, which is far cheaper than gasoline as a vehicle fuel in Kazakhstan because of price caps. But the government argued that the low price was unsustainable and lifted the caps on Jan. 1.
After the price of the fuel spiked, big demonstrations erupted on Jan. 2 in certain parts of the country. Public protests are illegal in the country unless their organizers file a notice in advance.
Following the development of the situation, the government declared a state of emergency all over the country. Kazakh President Kassym-Jomart Tokayev said the government initiated anti-terrorist operations to deal with the ongoing riots.
Also, the divisions of the united peacekeeping contingent of CSTO (Collective Security Treaty Organization) arrived in Kazakhstan to assist in restoring order and help protect strategic objects of the country.