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UPDATE 1-Kazakhstan to keep current tenge trading band if Brent stays around $50
February 12, 2015 / 5:27 AM / 3 years ago

UPDATE 1-Kazakhstan to keep current tenge trading band if Brent stays around $50

(Adds Kelimbetov quotes, details)

ALMATY, Feb 12 (Reuters) - Oil-rich Kazakhstan will keep the tenge currency within its current trading corridor of 170-188 to the dollar if the price of benchmark Brent crude oil remains at around $50 per barrel, the central bank head said on Thursday.

The Kazakh National Bank devalued the tenge by 19 percent last February to curb speculative pressure on the forex market, to protect reserves and to boost economic growth by supporting exporters.

“We believe that if the price for the benchmark Brent oil, which we foreacast to be $50 per barrel in 2015, keeps at this level, then we will manage to keep the tenge within the current trading band,” National Bank Governor Kairat Kelimbetov told a news conference.

Kazakhstan, Central Asia’s largest economy and the second-largest ex-Soviet oil producer after Russia, will revise its budget for this year. The new draft proposed by the government is based on an assumed Brent price of $50, compared with the original optimistic scenario of $80.

In the medium-term, Kazakhstan plans to introduce inflation targeting, which would allow to make the tenge rate “more flexible”, Kelimbetov said.

“I believe that this medium-term transition (to inflation targeting), which we expect in the nearest three years, will be the right approach,” he said. (Reporting by Dmitry Solovyov; Additional reporting by Raushan Nurshayeva in Astana; Editing by Mariya Gordeyeva & Kim Coghill)

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