Kazakhstan: A change to the exchange rate regime
Overview:
The National Bank of Kazakhstan (NBK) has changed its exchange rate regime to reflect a gradual recovery from the economic crisis. The Tenge (KZT) exchange rate regime has gone through a number of changes during the last few years. First, the KZT was tied to the dollar as the economic crisis hit to help facilitate the work-out of large private sector external debt obligations coming due as international liquidity dried up. The KZT was then devalued against the US$ in February 2009 to reflect exchange rate devaluations elsewhere (particularly in Russia) and restore the competitiveness of the real exchange rate. Now, as the currency stabilises and foreign exchange reserve levels start to increase once more the NBK has both revalued the central point of the band and widened the permitted fluctuation around it.