Kazakh National Bank Releases Statement on Domestic Exchange Market Following Collapse of American Banks

ASTANA – The Kazakh National Bank (NB) reserves the right to conduct currency interventions to maintain liquidity in the foreign exchange market and smooth out sharp fluctuations in the exchange rate, the bank’s press service reported on March 16. 

The building of the National Bank. Photo credit: nationalbank.kz.

This will support market exchange rate mechanisms without limiting the likely volatility of the tenge.

The statement was released following the collapse of the Silicon Valley Bank and Signature Bank in the United States on March 10-12. This caused a surge of volatility and a decline in investor appetite for risk as a result of concerns about the banking sector in the US and the European Union. 

Earlier, National Bank Chairman Galymzhan Pirmatov said the situation in the U.S. banking sector can have a very limited impact on the Kazakh banking sector.

“So far, we do not see any reason for concern.  There is enough liquidity in our banking sector. If necessary, we are ready to make interventions in the foreign exchange market,” Pirmatov told Kazinform at the Senate meeting on March 16.

According to Reuters, Credit Suisse shares rebounded on March 16 after receiving a $54-billion loan from the Swiss National Bank, “prompting a modest rally in European equities.”

There is an increase in volatility and a weak tenge against the U.S. dollar in the domestic exchange market, which is further complicated by the drop in oil price to $73-74 per barrel, according to the National Bank. 

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