Trump Administration's Effect on Kazakhstan's Economic Landscape
In the ever-changing global economic landscape, Kazakhstan's tenge is facing potential challenges and opportunities. Experts, such as economists Arman Beisembayev and Askar Kysykov, have weighed in on the factors shaping the tenge's exchange rate.
The greater concern for Kazakhstan is the ruble, given the country's historical parity of five tenge per ruble and the fact that it imports many goods. Beisembayev mentions risks that could push the tenge rate back to 530 tenge or 550 tenge per dollar later in the year, while Kysykov anticipates the exchange rate to remain between 530-550 tenge per dollar in the first half of the year, with a slight weakening in the long term.
The dynamics of the tenge's exchange rate will depend heavily on the state of the Russian economy, Beisembayev emphasizes. He predicts the tenge will likely remain around 530 tenge per dollar in the first half of the year, but there is a possibility of moderate strengthening to 505-510 tenge per dollar. Kysykov notes oil prices and the Russian ruble as critical factors influencing the tenge.
Trade wars, particularly between the United States and China, could affect Kazakhstan due to Russia's economic ties to both countries. The resolution of the Russia-Ukraine conflict will also influence the region's future.
The National Bank is intervening to stabilize the exchange rate due to high demand for foreign currency and expectations of depreciation. Kysykov believes the National Bank has the tools to smooth out volatility and prevent destabilization.
Beyond these specific predictions, general economic factors and forecasts might influence the tenge's strength against the US dollar. Kazakhstan is experiencing high inflation, which can lead to currency depreciation. The National Bank maintaining a high base rate (16.5%) is an attempt to control inflation but might not fully stabilize the currency.
Kazakhstan's projected economic growth of around 5% in 2025, driven by investments and infrastructure projects, could impact the tenge positively. Large-scale investment projects and increased oil production are expected to support economic stability.
Global economic trends, including a slowdown in global growth, and geopolitical factors could influence the tenge's strength against the US dollar. The Eurasian Development Bank suggests that despite these pressures, the tenge is expected to remain relatively stable, averaging around 513 to 515 tenge per dollar by the end of 2025.
The government's revision of the base forecast for the USD-KZT exchange rate from 475 to 540 tenge per dollar for next year indicates expectations of further depreciation due to inflationary pressures and potential reductions in withdrawals from the National Fund.
In conclusion, while specific insights from economists Arman Beisembayev and Askar Kysykov are valuable, it's essential to consider the broader economic context when evaluating the tenge's exchange rate. Kazakhstan remains vulnerable to fluctuations in both oil prices and the ruble, and global economic trends and geopolitical factors will play a significant role in shaping the tenge's future.
The industry and business sectors in Kazakhstan might witness changes as the exchange rate of its tenge, heavily influenced by the rubber's value, is predicted to maintain a range between 530-550 tenge per dollar in the first half of the year, with possible moderate strengthening or slight weakening in the long term. Additionally, political and general-news events such as global economic trends, trade wars, and geopolitical factors like the Russia-Ukraine conflict and the slowdown in global growth, could significantly impact the tenge's strength against the US dollar.
