National Bank: Kazakh citizens buying fewer US dollars

ASTANA – The National Bank reported a sharp decrease in May in the demand for U.S. dollars. Last month, Kazakh citizens purchased 23.4 percent fewer dollars compared to April.

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The population bought 146.1 billion tenge (US$444.1 million) in foreign currency in May. Bank experts report citizens purchased 52.9 percent of the total foreign currency in Russian rubles (77.3 billion tenge or US$234.9 million), 30.5 percent in dollars (44.6 billion tenge or US$135.5 million) and 15.8 percent in euros (23.1 billion tenge or US$70.2 million).

Compared to the previous month, foreign currency expenses increased 0.4 percent. Costs to purchase euros and rubles increased 24.6 percent and 13.5 percent, respectively. Expenses to buy U.S. dollars decreased 23.4 percent, reported the bank.

In April, the national currency exchange rate fluctuated in the range of 319.24-330.88 tenge per dollar. At the end of the month, the exchange rate was 327.25 tenge, weakening 2.8 percent during the month but strengthening 1.5 percent since the beginning of the year.

The National Bank indicated the volume of operations on the tenge/dollar currency pair reached $17 billion (a 41.7-percent per month increase) in April, including the volume of exchange trades at the Kazakhstan Stock Exchange ($4.4 billion or an 84.9 percent increase). The volume of transactions in the over-the-counter foreign exchange market was $12.6 billion, a 31.1-percent per month increase.

The report added the increased trading volumes of the tenge/dollar currency pair were in reaction to the volatility of Russian markets.

The Kazakh tenge got depreciated 19-percent in February 2014. The second wave of devaluation in August 2015 was even more dramatic. The government tried to correct it, but too many factors, including falling oil prices and additional downward pressure from the rapid devaluation of the ruble, influenced the economic situation.

The two devaluations have dented Kazakh citizens’ trust in the national currency, but thanks to the National Bank’s economic policy they have regained trust in the tenge and are again beginning to save in the national currency.

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