Azernews.Az

By Bloomberg

Kazakhstan has no plans to devalue its currency even as the price of its main export, crude oil, plummets, according to central bank Chairman Kairat Kelimbetov.

The 25 percent slide in the price of crude since June, coupled by a weakening of the Russian ruble, the currency of the Asian nation's second-biggest trading partner, are not "critical" for the tenge, Kelimbetov told reporters in Astana today. The tenge, closely controlled by the central bank, has been in a tight band around 185 per dollar since a 16 percent devaluation on Feb. 10.

"The corridor has enough margin of safety for us to stay in there," he said. "We believe that the February exchange- rate correction took into account all the changes which we're observing now."

The Kazakh economy expanded 3.9 percent in the second quarter from a year ago, within 0.1 percentage point of the slowest pace since 2010. Oil increased 0.6 percent to $85.95 per barrel at 10:54 a.m. in London, after dropping to a four-year low last week.

Russia has spent more than $13 billion of its foreign- currency reserves to slow the ruble's decline this month as U.S. and European Union sanctions over Ukraine exacerbated a dollar shortage and falling oil prices dimmed the outlook for the world's biggest energy exporter. The tenge is trading at 4.4212 per ruble, the strongest level since the February devaluation and a 19 percent appreciation from June.

"We believe the central bank is likely to want to see what happens to the Russian ruble and the Brent oil price over a few more months before making any significant decision on the tenge," Dominic Lewenz, co-head of research at Almaty-based Visor Capital, said by phone today. "The Kazakh government has comfortable reserves to give it sufficient breathing space."