OREANDA-NEWS. February 14, 2014. National Bank Chairman Kairat Kelimbetov explained the reasons for tenge rate adjustment against the US dollar.

"First, leading developing countries have this situation, particularly BRICS countries: Brazil, Russia, India, China and South Africa. As a result of the reduction of quantitative easing, there is a capital flow from developing to developed countries in the USA leading to growth of pressure on the currencies of these countries. Volatility in global financial and commodity markets has been increased against the background of uncertainty over the further development of the world economy. Secondly, uncertainty about the exchange rate of the Russian ruble remains. Russian ruble weakened by 7.1% against the US dollar in 2013 as the result of transition of the Central Bank of the Russian Federation to a freer exchange rate formation. The weakening trend of the Russian ruble’s exchange rate continued in January of this year, K. Kelimbetov said at CCS briefing. He added that the third reason is the balance of payments of Kazakhstan.

As K. Kelimbetov noted despite the fact that the current account is positive, an increase in imports is observed, mainly due to imports of consumer goods. Fourthly, it is high devaluation expectations in the economy of Kazakhstan and strengthening of speculative trading in connection with it. National Bank is forced to participate regularly in the foreign exchange market to counteract speculative frenzies and prevent excessive volatility of the exchange rate. After all this analytical work, it is decided that the equilibrium rate is 185 tenge, and we will defend it. In this connection, we believe that the potential of speculative devaluation expectations is exhausted and we assume that the situation will stabilize around rate of 185 tenge," K. Kelimbetov stressed.

"In general, all these changes are made in the context of improving the competitiveness of the tenge exchange rate and, consequently, improve the competitiveness of producers of Kazakhstan - both exporters and producers of import-substituting products. This will give our manufacturers within the Customs Union the opportunity to strengthen their position," the Head of the National Bank said.