The exchange rate of the tenge is showing significant weakening, for the first time exceeding the psychological mark of 500 tenge per US dollar. On the stock exchange on November 28, the rate fluctuated between 518-519 tenge per dollar, with the average weighted value at 512.58 tenge, which is 2.4% weaker than the previous day's figure.
Why is the tenge losing ground?
Both internal and external factors are simultaneously exerting pressure on the currency market.
- Global Strengthening of the US Dollar
The DXY index, which tracks the dollar's value against major world currencies, rose to 106.2 points, increasing by 2.2% since the beginning of the month. This strengthening is putting pressure on the currencies of emerging markets: the emerging markets currency index fell by 3.0% during the same period. - Commodity Prices and Geopolitics
The rise of the dollar traditionally has a negative impact on commodity markets. Price volatility for oil has intensified amid expectations of an oversupply due to increased shipments from the U.S. and potential new trade tariffs. - Weakening of the Russian Ruble
The ruble, the currency of one of Kazakhstan's key trading partners, has accelerated its decline due to sanctions against Russia's financial sector. On Forex, the ruble's exchange rate reached 114.5 per dollar, indicating an 18% weakening since the beginning of the month. - Internal Factors
There has been an increased demand for foreign currency in the domestic market, while the supply remains limited. The breach of the psychological exchange rate threshold has led to an increase in the average daily trading volume in November to 238 million dollars — 1.5 times more than a year ago.
What is the National Bank doing?
To reduce volatility and prevent destabilizing fluctuations, the National Bank is conducting currency interventions. Although the tenge operates under a free-floating exchange rate regime, the Bank is ready to intervene in cases of excessive volatility that do not align with fundamental factors.
The currency market is monitored continuously, and the National Bank's interventions are aimed solely at smoothing sharp fluctuations to maintain stability and liquidity.
What’s next?
The formation of the tenge's exchange rate will continue to be determined by fundamental factors — both external and internal. Nevertheless, the National Bank is prepared to respond to potential risks to ensure fair exchange rate formation and maintain the stability of the country's financial system.