ASTANA, Kazakhstan, February 15. The tenge will strengthen by 1.7 percent against the U.S. dollar in 2023, The National Bank of Kazakhstan (NBK) told Trend.
"The tenge was supported by improving global risk sentiment, the inflow of non-residents into government bonds, as well as the declining level of deposit dollarization," the NBK informed.
According to the NBK, since 2015 Kazakhstan canceled the currency corridor and moved to a freely floating exchange rate. Under the policy of a free-floating exchange rate, the tenge exchange rate can change daily both toward weakening and strengthening, depending on the influence of supply and demand factors.
"In the short term, the exchange rate of the national currency under the free-floating exchange rate policy mainly depends on the expectations of market participants, which are formed based on a set of supply and demand side factors, including production volume and oil price, the exchange rate of currencies of major trading partners, risk sentiment of international investors towards developing countries, inflation rate, geopolitical situation, and other factors. The long-term trend of the tenge rate will be determined by the action of fundamental factors, mainly oil price and exchange rates of currencies of countries - major trading partners, as well as the state of the balance of payments, inflation rate, world interest rates", the representative of the bank emphasized.
Referring to the implementation of the Digital Tenge in the NBK mentioned that it is at the stage of the pilot project together with financial market participants - second-tier banks.
"Taking into account the preparatory work on the side of market participants, the Digital Tenge will be scaled in stages and will be available to the public in time for the end of 2025. This year it is planned to scale services and expand the number of participants of the pilot project Digital Tenge. The new scenarios will be tested, including offline payment, and the possibility of cross-border settlements," the NBK added.
Stay up to date with more news on Trend News Agency's WhatsApp channel
