This content is not available in your region

Kazakhstan surprises with big devaluation of its currency

Kazakhstan surprises with big devaluation of its currency
Text size Aa Aa

Kazakhstan has devalued its currency, the tenge, by 19 percent.

It had been undermined by Russia – its main trading partner – allowing the rouble to slide.

Moscow did that as investors bailed out of emerging market currencies due to the scaling back of US monetary stimulus.

Kazakhstan also has a worsening balance of payments problem from rising imports, mainly of consumer goods.

The size of the devaluation was a surprise. It is far larger than the rouble’s five percent decline this year.

“From a qualitative perspective it makes sense. The quantity… is way too much,” said Ivan Tchakarov, a Moscow-based economist at Citi who covers Russia and the Commonwealth of Independent States.

Analysts said the Central Asian nation seemed determined to put a floor under its currency, which is important as it is a big exporter of energy and commodities.