ASTANA – The Kazakh tenge strengthened 2.6% against the US dollar in August, reaching 461.57 per dollar at the end of the month, as foreign currency supply continued to exceed demand amid increased market activity and changing capital flows, according to Saltanat Igenbekova, head of the Analytics Center at Halyk Finance.
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According to the center’s analysis of the National Bank’s monthly foreign exchange market data, trading activity remained high in August, while the structure of currency flows changed.
The total trading volume on the Kazakhstan Stock Exchange (KASE) reached $8.7 billion, up from $8.6 billion in July. Average daily trading volumes increased to $415 million, reads the analysis published on Sept. 4.
Saltanat Igenbekova, head of the Analytics Center at Halyk Finance. Photo credit: digitalbusiness.kz
The tenge strengthened despite a decline in some traditional sources of foreign currency supply. Net foreign currency sales by the National Bank fell to $284 million in August from $617 million in July.
Sales of foreign currency from the National Fund amounted to $200 million, within the announced range of $200-300 million.
At the same time, the National Bank purchased $721 million in foreign currency for the investment portfolio of the Unified Accumulative Pension Fund, twice July’s $375 million.
Non-resident capital supports tenge
The analysis attributes much of the stronger currency supply to foreign portfolio capital.
“In our assessment, the high level of foreign currency supply on the market was largely supported by the inflow of non-resident capital through several channels,” Igenbekova said.
She linked investors’ interest in tenge-denominated assets to their attractive real returns, growth in Kazakhstan’s combined foreign exchange reserves and the country’s sovereign credit rating upgrade by S&P this year.
The role of the quasi-public sector as a source of foreign currency supply was more limited following the suspension in July of the requirement for quasi-public entities to sell 50% of their foreign currency earnings.
The center also noted that the National Bank conducted no foreign exchange interventions in August.
Trading activity rises
Foreign exchange trading on KASE reached $60 billion in January-August, up $21.8 billion from the same period in 2025.
Unlike the previous year, when higher trading volumes coincided with a weaker tenge, the currency strengthened from 501.2 tenge per dollar at the start of this year to 461.6 at the end of August.
“The observed strengthening points to the continued predominance of foreign currency supply over demand during the period under review,” Igenbekova said.
September outlook
Foreign currency sales from the National Fund are planned at $200-300 million in September. The National Bank also expects to sell foreign currency equivalent to 374 billion tenge under its gold-operations mirroring mechanism.
Igenbekova said it will update the tenge outlook following changes in the expected use of National Fund transfers.
“The main factors influencing the exchange rate remain the balance of foreign currency flows in the domestic market, global oil prices, and the activity of non-residents,” Igenbekova said.
According to the analysis, the interaction of these factors will determine the tenge’s direction in the coming months.
