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Devaluation minimizes cost of crisis for Kazakhstan - Nazarbayev
Astana, February 13 2009
Kazakh President Nursultan Nazarbayev has said the devaluation of the national currency, the tenge, was a necessary step.
"The devaluation of the national currency was definitely painful, but it was a necessary anti-crisis measure. Kazakhstan kept its currency stable longer than other countries, and spent more than $6 billion to that end," Nazarbayev said, speaking at a meeting of the Nur Otan party's political council in Astana on Thursday.
"The devaluation made it possible to minimize the losses from the first blows of the global crisis. Continuing to maintain the tenge artificially was extremely dangerous. If we had done so, the real sector of the Kazakh economy would not have been able to compete," he said.
"The tenge devaluation was carried out to defend the national economy and domestic producers and to preserve the gold and forex reserves," he said.
"To those who are suffering on account of the exchange rate, I say that when energy prices recover, our economy will increase its production, the tenge will strengthen and we will once again have to take measures so it does not strengthen too much, so that we don't put our exporters in a difficult situation," he said.
It was reported earlier that the National Bank announced on February 4 that it would allow the tenge to devalue from the previous corridor of 117-123 tenge/$1 (within 2% of 120 tenge) and said the new exchange rate would settle to within 3% of 150 tenge/$1. The devaluation aims to make Kazakh output more competitive and to conserve international reserves.
The devaluation brought higher prices in the shops and a shortage of foreign currency at currency exchange points in a number of cities.
The exchange rate on February 12 was 148.11 tenge/$1.