Kazakh Currency Trades Drop After Speculation Warning

July 16. Bloomberg

By Nariman Gizitdinov

Currency trading on the Kazakhstan Stock Exchange fell to $105 million today, a third of the amount yesterday, after central bank Governor Grigori Marchenko ruled out a devaluation and said bankers who fueled speculation in the tenge “must be punished.”

Transactions, down from $278.1 million yesterday, are above the $45 million on July 13, according to data on the bourse’s Web site. The tenge was little changed today at 150.75 per dollar from to 150.72 yesterday, the exchange said.

Kazakhstan has defended the tenge since its 21 percent devaluation in February even as the central Asian nation’s financial crisis forced the government to seize control of BTA Bank, the biggest lender, and spend more than $5 billion to prop up the economy and banking system. BTA is in default on as much as $15 billion and Alliance Bank, the fourth largest lender, is restructuring $4.19 billion.

Marchenko said yesterday managers at ATF Bank, a unit of UniCredit SpA, Halyk Savings Bank, Kazakhstan’s third-largest lender, and Eurasian Bank had advised clients to buy dollars and that “managers in these banks must be punished by these banks.”

“This information isn’t true,” Almaty-based ATF Bank said in an e-mailed statement today. “ATF Bank never gave such advice.” The devaluation in February was “effective and enough to stabilize Kazakhstan’s economy,” the bank said.

Halyk Denial

Halyk Savings Bank denied it recommended that clients buy dollars. “The bank’s management will take the toughest measures to cut such precedents if it finds such activity among its individual officials,” Askar Smagulov, Halyk’s deputy chief executive, said in a statement e-mailed today. “We can’t exclude that the name of the bank was used to destabilize the situation in the currency market.”

Eurasian Bank said yesterday it can’t comment on the “contradictory and unsupported” information.

The tenge strengthened 1.5 percent to 150.76 per dollar as of 3:31 p.m. in Almaty, according to Bloomberg data.