Kazakh c.bank: will slow pace of tenge appreciation

April 21. Reuters. ALMATY

Kazakh c.bank: will slow pace of tenge appreciationKazakhstan’s central bank will slow down the pace of its tenge currency’s appreciation to protect economic competitiveness, its chairman said on Wednesday.

Grigory Marchenko told reporters the tenge had strengthened by 8 percent against the dollar in real terms over the last six months.

“If this continues at the same pace, it will negatively affect the competitiveness of our economy,” Marchenko said. “We will resist appreciation more strongly than depreciation. We will not allow fast tenge appreciation.”

Kazakhstan devalued the tenge by 18 percent in February 2009 after prices for its key exports, oil and metals, fell sharply. But the tenge started strengthening again last November and has since climbed to 146.46 per dollar from about 151 per dollar.

The central bank has bought about $9 billion since November to curb the appreciation, Marchenko said. The official trading band for this year is 127.5-165.0 tenge per dollar.

Kazakhstan’s economy had contracted for three quarters of 2009 but the government reported growth of 1.2 percent for the full year and sees gross domestic product growing by 1.5-2.0 percent in 2010.

Marchenko said the central bank maintained its growth outlook, based on an average oil price of $60 per barrel, at 2.0 percent, but said higher oil prices would lead to faster growth.