Mining and metallurgy businesses benefit by tenge depreciation
February 13. Kazpravda
By Kulpash Konyrova
Mining and metallurgical companies in Kazakhstan, whose produce is chiefly exported, definitely benefit by devaluation of tenge, their executives say.
Officially, Kazakhstan is 42nd on the list of world exporters. The export geography extends to 119 countries. The main export articles, bringing tangible revenues to the country, are oil and gas, ferro alloys and uranium, also grain and flour. This year, Kazakh export flows are bound for Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Armenia, Russia, China, Iran and Afghanistan.
As the Finance Minister Bakhyt Sultanov said on Tuesday, commenting on the National Bank’s decision to correct the tenge rate, it would have a positive impact on Kazakhstan exports and improve the external trade balance of the country. In addition, depreciation of tenge leads to higher prices on imported goods, which will make them less competitive to the local wares and therefore restrict imports. It is a protective measure for the national industry, especially in the frames of the integration process.
This statement was confirmed by Kazakhstani miners and metallurgists, the bulk of whose output is exported. Thus, the deputy executive director of the Association of RK Mining and Metallurgical Enterprises Tulegen Muhanov, said at a briefing in Astana yesterday that the Kazakh mining and metallurgical enterprises will benefit from the devaluation of tenge; it is good amid the falling world prices for iron ore and metals. He reminded that the association members are nearly 300 large enterprises, whose 90% of the produce is exported .
– Our share in the country’s exports is 13%. It is a lot. And on the work of our business depends the macroeconomic stability of the domestic economy, – he added.
As noted, in recent years many ferrous businesses have been disadvantaged, as the price of their output was almost halved. And now it will be possible to repair the situation, and thus get means that can be spent on production upgrades and social projects.
Kazakhmys corporation leadership also supported the National Bank’s step, expecting gains that could go to the development of business and of Zhezgazgan region – said the company CEO Eduard Ogai at the briefing.
– We are working in the open market with Russian and foreign producers, and hope they will work with us on the same terms as before.