OCT. 31 2014 (The Conway Bulletin) – A 40% drop in the value of the rouble this year is placing extreme pressure on Russia’s main trade partners, including Kazakhstan, experts have said.
Banking analysts have said that it is increasingly likely the Kazakh Central Bank will have to follow the rouble and devalue its own tenge currency for the second time this year.
The Tengrinews website quoted Raimbek Batalov, director at Raimbek Group, as saying that the fluctuating value of the tenge was hurting exporters. Kazakh goods are now far too expensive for their main export market — Russia.
And reports have emerged from across Kazakhstan that people are rushing to banks to sell their tenge before an imminent devaluation.
Falling oil prices and sanctions imposed by the West have pressured the rouble while the Kazakh Central Bank has insisted on keeping the tenge pegged to the US dollar since its 20% devaluation in February.
Luca Anceschi, professor of Central Asian Studies at the University of Glasgow explained that the rouble was introduced in 1993 to reduce Kazakhstan’s dependency on the rouble. Instead, he said, the opposite has happened.
“The policies pursued since 1993, if anything, have de facto re-established such dependency,” he said.
Increased economic integration with the Eurasian Economic Union gives Kazakh President Nursultan Nazarbayev even less room to manoeuvre.
A second devaluation, to keep pace with Russia’s currency slide, must be approaching fast despite the Central Bank’s denials.
ENDS
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(News report from Issue No. 207, published on Nov. 5 2014)