Kazakh c.bank to consider managed float for tenge in 2011

Dec 7. Reuters. ALMATY

* Trading corridor “not needed” – c.bank head
* Decision pending approval of c.bank board
* C.bank buys $650 mln on forex market in November

Kazakh c.bank to consider managed float for tenge in 2011Kazakhstan’s tenge currency should return to a managed float next year and its current trading corridor should be removed, the chairman of the central bank said on Tuesday.

Grigory Marchenko said a final decision had not been made but that he hoped the board of the central bank would approve his proposal to scrap the corridor of 127.5-165 per dollar introduced after the currency was devalued in February 2009.

“Next year we will return to a managed float,” Marchenko told a news conference. “The trading corridor is not needed,” he said. “I hope the (central bank) board will support us.”

Kazakhstan’s economy, the largest in Central Asia, is rebounding from the financial crisis thanks to higher prices for its main exports, oil, metals and grain. Several Kazakh banks have also managed to restructure their defaulted debt.

The tenge has traded in a corridor since the central bank devalued the currency by 18 percent in response to the deepening financial crisis and a weakening rouble, the currency of Kazakhstan’s main trading partner, Russia.

Central bank data shows the average official tenge rate in November was 147.5 per dollar.

Marchenko said the central bank purchased $650 million on the foreign exchange market in November.

Also on Tuesday, the central bank announced that its net gold and foreign currency reserves fell to $27.3 billion as of Nov. 30 from $28.4 billion on Oct. 31.