Since February 12, the Kazakhstani currency has shown a notable strengthening against the US dollar. The exchange rate on the KASE has recently dropped below 500 tenge, a level last seen at the end of November 2024.
Timur Suleimenov, the chairman of the National Bank of Kazakhstan, explained to Forbes Kazakhstan the reasons behind this trend, citing both internal and external factors.
The first reason, according to Suleimenov, is the tax payment period, during which major exporters, primarily resource companies, actively sell their foreign currency earnings to meet their budget obligations. This has consequently increased the supply of foreign currency in the market.
The second reason, as presented by the head of the National Bank, is the decline in demand for imported goods. “Because funds from the state and quasi-state sectors tend to be utilized closer to the end of the year. In other words, it’s not such an active period in terms of high demand,” he explained.
Simultaneously, Suleimenov believes that positive developments in negotiations [Trump's phone conversation with Putin and Zelensky], aimed at ensuring peace in Ukraine, have lent “strength” to the tenge. In his view, this has favorably impacted the energy and financial markets, which has supported the tenge.
Suleimenov also mentioned the policy of the National Bank. In particular, he noted that the actions of the monetary regulator, such as mirroring gold operations, are aimed at stabilizing the market.
“The market recognized that we are acting consistently, announcing how much we will sell and adhering to that,” he clarified. “I think the market didn’t fully understand this in the first month, in January. Now it understands that a specific volume of dollar liquidity will come from us, and we provide it daily in equal parts.”
Consequently, this factor has also had a calming effect on the market.
“Moreover, many have realized that the levels of dollar overvaluation were excessive. Now they are trying to lock in profits, meaning they are actively selling currency in the market,” added the head of the National Bank.
When asked what will happen to the dollar exchange rate and whether it will remain at the 500 tenge mark, Suleimenov emphasized that the National Bank of Kazakhstan does not engage in forecasting.
“We do not provide forecasts because it is counterproductive; the market will strive for this, which is unnecessary. The market should balance itself under the influence of demand, supply, fundamental, and market factors,” he stated.
At the same time, as long as the aforementioned factors remain in play, the exchange rate is expected to stay approximately at the same level, according to the head of the National Bank. The future dynamics of the rate will depend on changes in internal and external conditions.