BAKU, Azerbaijan, June 1. Tenge (Kazakh national currency) exchange rate strengthened to 415.1 tenge per dollar, or by 6.8 percent as a result of May, despite the ongoing uncertainty and volatility in global financial markets, Trend reports with reference to Kazakh National Bank.
The average daily trading volume on the Kazakhstan Stock Exchange (KASE) amounted to $115 million, with a total trading volume of $2.2 billion.
"The strengthening of the national currency is associated with a number of factors, including consistently high energy prices and period of tax payments by exporters, change in sentiment of market participants due to a decrease in demand for foreign currency on part of individuals, strengthening of the exchange rate of both Russian ruble and, in general, currencies of developing countries,” bank said.
“The supply in the foreign exchange market was also supported by the sale of foreign exchange earnings by entities of the quasi-public sector, which amounted to about $598 million in May. Amid a period of large tax payments to the budget and corresponding need to sell foreign currency, supply of foreign currency significantly exceeded,” National Bank added.
“Kazakh National Bank purchased an excess supply of foreign currency in the amount of $110.5 million in order to maintain liquidity and level the existing imbalance between supply and demand of foreign currency during tax week," the press service of the bank also said.
According to the National Bank, $4 million were sold at the beginning of the month to allocate transfers from Kazakh National Fund to the government budget.
"No conversions of National Fund's currency were required due to the fact that transfers were provided at the expense of receipts to the Fund.
A total of $74.5 million was purchased for pension assets of Unified Accumulative Pension Fund JSC in the foreign exchange market, in order to maintain the foreign exchange share of pension assets at a level of at least 30 percent, to diversify the investment portfolio, in May 2022.
Tenge volatility, in the short term, will depend on changes in the geopolitical situation, expectations of domestic participants and the situation on world markets.
Kazakh National Bank will continue to adhere to the flexible exchange rate regime, which eliminates the accumulation of imbalances and ensures the safety of gold and foreign exchange reserves.
