The National Bank could have supported the tenge through currency interventions, according to an economist.

The National Bank may have intervened to support the tenge amid a sharp decline in the Russian ruble and the USD/KZT exchange rate surpassing the 500 tenge per dollar mark, according to Orda.kz.

https://orda.kz/nacbank-mog-podderzhat-tenge-cherez-valjutnye-intervencii-jekonomist-395017/2024-11-28 07:32:17

“The most concerning moment was the behavior of the cross-rate of the tenge to the ruble (RUB/KZT), which strengthened yesterday to 4.3–4.4 for the first time since August 2023 amid a sharper weakening of the neighboring currency, and prior to that, it had been at these levels in March 2022. This indicates a significant deviation of the cross-rate from the long-term parity of five, which essentially reflects the consensus among market participants regarding currency rates,” Aitkazin noted.

On November 27, the trading volume on the KASE currency section reached $455.4 million. This is more than double the figure from the previous day, and since the onset of the pandemic, the daily trading volume has even hit a record level. Such activity is considered anomalous and may indicate regulatory intervention.

“We tend to believe that market participants' faith in a stronger tenge against the dollar compared to the Russian currency, as a factor explaining the behavior of the cross-rate, is unlikely in the current realities. This is due to the existing internal factors and rhetoric regarding the tenge's exchange rate against the dollar. Therefore, there are grounds to assume that the National Bank of Kazakhstan may have conducted currency interventions yesterday to support the tenge, as can also be inferred from the record trading volumes on KASE,” Aitkazin stated.

The economist also reminded about the mandatory sale norm of 50% of the foreign exchange earnings of the quasi-public sector, which could have provided additional support to the tenge's exchange rate. However, the regulator has not made any official statements yet, so there is no direct confirmation of interventions.

At the same time, in the exchange offices of Almaty, Astana, and other cities in Kazakhstan, the dollar has been holding at around 500 tenge and above for over a week. On November 18, it was purchased for 500 tenge in Astana and for 499.5 in Almaty.