Azernews.Az

By Aynur Karimova

President Nursultan Nazarbayev has urged the Kazakh people to keep their money in national currency, which has slightly strengthened against the USD.

Speaking at a meeting with Daniyar Akishev, the head of the country's National Bank, on March 28, Nazarbayev said that as the prices for basic commodities are stable, it is beneficial for Kazakhs to keep their money in the tenge, Akorda reported.

"Interest rates on the tenge are high, while they are lower on deposits in the foreign currency. Also, all purchase and sale transactions in our country are carried out in the national currency," Nazarbayev noted.

Akishev, for his part, provided information about the current activities of the National Bank, situation on the country’s financial market and emphasized the stabilization of the situation on the currency market in March 2016.

He believes that Kazakhstan's national currency has strengthened in March due to several external factors.

“Such fundamental external factors as oil prices, exchange rates in the countries which are our trade partners, have stabilized. Under these conditions, the tenge started to strengthen positions from February and this tendency continues in March,” he noted.

In March, Kazakhstan has witnessed a significant decrease in fluctuation of the national currency and its strengthening by 1.6 percent.

This trend has given an impetus to the process of de-dollarization of deposits.

"Population and enterprises have gradually increased their deposits in the national currency. This month, this process accelerated sharply," Akishev stated.

Kazakhstan was forced to go to devaluation of the national currency three times since 1999. Over the past two years, the Kazakh national currency lost more than half of its value.

Kazakhstan, the largest oil producer among former Soviet republics after Russia, shifted to a floating exchange rate in August 2015 after the tumbling crude prices and devaluations in Russia and China. As a result, the exchange rate of the tenge against the USD halved within six months.

Kazakhstan Stock Exchange reported on March 28 that the official exchange rate of the tenge was 340.42 KZT/$1 on March 28 against 344.41 KZT/$1 on March 25.

The maximum rate of tenge was observed on January 1-5 – 340.01 KZT/$1 since the beginning of 2016, while the minimum rate – on January 22 – 383.91 KZT/$1, according to the National Bank.

Experts, however, predict a sad scenario for the tenge's fate. They believe that in the near term, oil will probably continue to fall and that will negatively affect the tenge.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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