Kazakhstan cancels currency corridor

Kazakhstan started implementing a new monetary policy based on a free-floating tenge rate, Kazakh Prime Minister Karim Massimov said at a governmental meeting Aug. 20, RIA Novosti reported.

"The exchange rate will be based on the market supply and demand, taking into account the fundamental internal and external macroeconomic factors,” he said. “This means that the exchange rate can vary. This will be determined by the situation in the world economy and the domestic currency market."

“The National Bank will not intervene in the formation of the market level of the tenge exchange rate,” he said. “But it reserves the right to participate in the domestic foreign exchange market through the foreign exchange intervention in case of a threat of destabilizing the financial system.”

In mid-July, the National Bank of Kazakhstan expanded the corridor of fluctuations of the tenge exchange rate from 170-188 tenge to 170-198 tenge per $1. It motivates this by deteriorating of the external situation and, above all, an oil price drop.

/By Trend/