Kazakhstan Currency Alarm Deepens and Spreads
Nerves in Kazakhstan over the state of the national currency turned first to alarm, and now to pretty much outright panic.
Yielding to the inevitable, Prime Minister Karim Masimov announced on August in a special video message that the government would switch to a free-float currency exchange. The value of the tenge duly plummeted 26 percent against the dollar and was trading at 255 by the end of the day.
“On July 15 this year, the National Bank took a decision to widen the currency corridor in order to enable a more flexible and floating exchange rate for the tenge,” said Masimov. “But the situation on the global economy continues to worsen. The prices for the main export goods of our country — oil and metals — have continued to fall, which has had a negative effect on the economic growth.”
Masimov said a priority would be placed on shoring up social welfare, but such remarks will do little to stave off immediate reactions to the collapse of the currency.
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