March 20, 2019 / 9:22 AM / 5 months ago

UPDATE 1-Kazakh tenge slips after veteran president resigns

(Recasts with updated figures, adds quotes)

ALMATY, March 20 (Reuters) - Kazakhstan’s tenge currency edged down 0.6 percent on Wednesday following the surprise resignation of veteran leader Nursultan Nazarbayev, who has run the central Asian nation for three decades.

The former Soviet republic’s government and central bank said in a joint statement there would be no changes to their economic policies and that the central bank was capable of preventing any “speculative operations”.

The central bank also said separately it was not intervening in the local market, but was ready to supply extra cash, both local and foreign currency, to banks if needed.

Local bureaux de change sold dollars at about 380 tenge, more than 1 percent more than the official rate, as some Kazakhs rushed to buy foreign currency.

Kazakhstan’s international bonds and London-listed shares of the country’s largest lender, Halyk Bank , fell late on Tuesday after Nazarbayev said he would step down.

However, Nazarbayev, 78, said he would retain the key posts of security council chair and leader of the ruling Nur Otan party, indicating he aims to ensure a smooth political transition in the oil-exporting nation.

But some analysts say the transition could delay long-term reforms and make economic policies more populist.

“The question for monetary policy is whether it remains cautious, as premature easing - a cut in the key rate before 3Q19 - may add to the risks to the Kazakhstani tenge, which is already facing headwinds due to key oilfield maintenance and potential negative spill-over effects from Russia and China,” said Dmitry Dolgin, chief Russia and CIS economist at ING. (Reporting by Olzhas Auyezov Additional reporting by Karin Strohecker in London Editing by Sam Holmes and David Holmes)

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