Kazakh currency tumbles 26% against U.S. dollar

On August 20, Kazakhstan introduced a freely floating exchange rate for the tenge, causing the national currency to plummet by 26 percent to 255.26 tenge/$1 when trading on the Kazakhstan Stock Exchange (KASE).

On August 20, Kazakhstan introduced a freely floating exchange rate for the tenge, causing the national currency to plummet by 26 percent to 255.26 tenge/$1 when trading on the Kazakhstan Stock Exchange (KASE).

Speaking at a Kazakh government session in Astana earlier on August 20, Kazakh Prime Minister Karim Masimov announced that starting from August 20 the country was introducing a freely floating exchange rate for its national currency tenge. Following this announcement, the tenge's weighted exchange average rate against the U.S. dollar on the KASE dropped by 66.88 tenge to 255.26 tenge/$1 as compared with August 19 results.

According to the latest data, some commercial banks and exchange offices have suspended dollar sales and have halted access to their websites.

"So far, there is no information concerning the exchange rate. They will unblock the website as soon as this information is received," a Kazcommertsbank spokesman has said Interfax.

The websites of stores selling consumer electronics have been temporarily blocked as well. Several shopping malls are not working either.

Masimov has promised that his government will take all the necessary measures to prevent an upsurge in prices for essential commodities.

"We will not permit any upsurge [in prices] for first necessity commodities in the short term. (…) But as far as a longer period is concerned, in my opinion, commodities should have market prices and the market alone is able to determine the price of this product. The state's duty is to ensure equal competition in order to provide everyone with equal access to the market, and the state ought to help the socially vulnerable sectors of the population," Masimov told a press briefing in Astana on August 20.

According to Masimov, the new measures will help make Kazakh products more competitive.

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