Kazakh tenge hits fresh all-time low as oil extends slide

ALMATY - Reuters

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The weighted average of the Kazakh tenge fell to a fresh all-time low of 356.88 per dollar on the Kazakhstan Stock Exchange on Jan. 11 from 351.88 on the previous trading day.

The price of crude, the biggest hard currency earner for the oil-exporting Central Asian nation, fell more than 1 percent on Jan. 11 as China’s economic slowdown dented the outlook for demand. The decline added to last week’s drop of more than 10 percent in both Brent and WTI prices to start the year.

The Russian ruble, the currency of Kazakhstan’s main trade partner, also weakened against the dollar on Jan. 11 and some analysts said oil was likely to reach $30 per barrel, predicting that the ruble would fall to 78.3 per dollar this week from the current level of 75.5.

Aivar Baikenov, head analyst at Asyl-Invest investment house, said the ruble’s weakening to 77-80 per dollar could push the tenge past the 370 mark.

“(But) we do not expect a move past 380, that would require another significant drop in the oil price to the tune of 20-25 percent,” he said.

On Jan. 6, Kazakhstan’s Central Bank began using the weighted average rate of the previous day’s two sessions as the official rate. Previously, it used only the morning session rate to determine the official exchange rate.