By this time, you must have been made aware by someone (by TV, FM, by Internet) that on August 20, Kazakhstan allowed its currency tenge to devalue and left the exchange rate to markets. That means the past practice of maintaining currency band by the national bank has been abandoned. This new development of Kazakh policy has pushed #tenge from 187 per dollar to 255 per dollar.
Mostly, why economies expand or contract depend mostly on its own economy like situation of forex reserves, ability to pay its external loans, export data, industrial output data, local/domestic economy etc. All these factors are responsible this time to bring tenge down from 187 to 255.
However, it must be understood that there were few external factors responsible for devaluation of Kazakhstan Tenge. First of all, the reduction on price of oil was the biggest culprits as it has affected the foreign currency earnings of Kazakhstan. On this scenario, Kazakhstan could not have done much as prices of crude oil is falling everywhere and it is not on its hand. War will help to put the price up but that is not a desirable option and it is unlikely any major war anywhere in the world will erupt any time soon. Ok! I am kidding. The point is Kazakh Government does not have much say on its stumbling prices of oils. This had definitely put pressure on Kazakh #Tenge and it had to be devalued slowly.
On the top of this pressure, the move by Russian and Chinese authorities to let it devalue/devalue their currency added extra pressure on tenge. The exports from China and Russia became cheaper due to sliding of Yuan and Rouble and #Kazakhstan had no other options than let the #Tenge devalue. Government has adopted a good mechanism by handing the currency to the market forces so that tenge can find its stability there.
You must be aware that #Kazakhstan #Tenge is not the only currency that has devalued due to China's deliberate move of devaluing Yuan. Due to China's deliberate move, and due to Russia's free falling #Rouble, other Asian countries' currencies are also falling either by market forces (where free floating exchange rate is adopted) or government is intervening to devalue them.
For example, look at this Bloomberg Article which writes on the devaluation of Vietnamese currency (dong) by government and losses made by other currencies like of Rand (South African Currency) and Lira (Turkey's Currency) in markets. The article also talks of chances of devaluation in other countries' currencies. So, it seems currency devaluation is a global phenomenon at the moment.
This is the last part of my commentary on #tenge devaluation by Kazakhstan in 2015. I will closely watch the Kazakh currency market and will come with other articles soon in the future. So, If you are keen to know more on Kazakh Currency devaluation, keep visiting my blog.
Mostly, why economies expand or contract depend mostly on its own economy like situation of forex reserves, ability to pay its external loans, export data, industrial output data, local/domestic economy etc. All these factors are responsible this time to bring tenge down from 187 to 255.
However, it must be understood that there were few external factors responsible for devaluation of Kazakhstan Tenge. First of all, the reduction on price of oil was the biggest culprits as it has affected the foreign currency earnings of Kazakhstan. On this scenario, Kazakhstan could not have done much as prices of crude oil is falling everywhere and it is not on its hand. War will help to put the price up but that is not a desirable option and it is unlikely any major war anywhere in the world will erupt any time soon. Ok! I am kidding. The point is Kazakh Government does not have much say on its stumbling prices of oils. This had definitely put pressure on Kazakh #Tenge and it had to be devalued slowly.
On the top of this pressure, the move by Russian and Chinese authorities to let it devalue/devalue their currency added extra pressure on tenge. The exports from China and Russia became cheaper due to sliding of Yuan and Rouble and #Kazakhstan had no other options than let the #Tenge devalue. Government has adopted a good mechanism by handing the currency to the market forces so that tenge can find its stability there.
You must be aware that #Kazakhstan #Tenge is not the only currency that has devalued due to China's deliberate move of devaluing Yuan. Due to China's deliberate move, and due to Russia's free falling #Rouble, other Asian countries' currencies are also falling either by market forces (where free floating exchange rate is adopted) or government is intervening to devalue them.
For example, look at this Bloomberg Article which writes on the devaluation of Vietnamese currency (dong) by government and losses made by other currencies like of Rand (South African Currency) and Lira (Turkey's Currency) in markets. The article also talks of chances of devaluation in other countries' currencies. So, it seems currency devaluation is a global phenomenon at the moment.
This is the last part of my commentary on #tenge devaluation by Kazakhstan in 2015. I will closely watch the Kazakh currency market and will come with other articles soon in the future. So, If you are keen to know more on Kazakh Currency devaluation, keep visiting my blog.
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