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INTERVIEW-Kazakh sovereign fund prepares for weaker oil, tenge
January 26, 2016 / 11:48 AM / 2 years ago

INTERVIEW-Kazakh sovereign fund prepares for weaker oil, tenge

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By Mariya Gordeyeva

ASTANA, Jan 26 (Reuters) - Kazakh Samruk-Kazyna sovereign wealth fund expects the country’s tenge currency to weaken further this year along with oil prices, its chief financial officer told Reuters on Tuesday.

“An optimistic scenario for our companies would be $35 per barrel and ... an exchange rate of up to 380 tenge per dollar (on average in 2016),” Yelena Bakhmutova, managing director in charge of finance and operations, said in an interview.

“The baseline scenario is $25 per barrel and 400 tenge per dollar, a stress one is $20 and 420 tenge per dollar.”

The tenge has lost half its value against the dollar since the authorities of the oil exporter abandoned their pegged exchange rate policy last August.

Kazakhstan’s 2016 budget is based on an average Brent crude price of $40 and 2.1 percent gross domestic product growth, but the government said this month it may have to be reviewed.

Bakhmutova said the fund, which manages assets worth about $50 billion, had cut all its investment programmes and was focusing on protecting jobs, keeping its companies afloat and servicing debt.

The fund’s main assets are big state-controlled companies such as KazMunayGaz and railways firm Kazakhstan Temir Zholy.

“This is going to be a tough year, tougher than the previous one,” she said.

The total foreign debt of Samruk-Kazyna companies fell by $7 billion to $17.3 billion last year, she said.

“Overall, 23 percent out of total foreign debt falls due within the next three years, of which 40 percent it makes sense to refinance,” Bakhmutova said, adding that she saw no risks in terms of debt servicing. (Reporting by Mariya Gordeyeva; Writing by Olzhas Auyezov; Editing by Maria Kiselyova and Dominic Evans)

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