The Kazakh tenge is likely to continue its gradual depreciation over the course of 2019 as higher prices for main export oil help stabilise it, after a sharp fall this week, according to a Reuters poll. Three of seven participants in the poll, which was carried out on Dec. 25-28, predicted that the Central Asian nation's currency would gain against the dollar next month.
Two analysts forecast a broadly stable month for the tenge and two said it would weaken from the current level of about 380 per dollar. The 12-month outlook was marginally bearish, with three analysts predicting a weaker tenge and the rest split equally between bullish and neutral.
The tenge touched a 35-month low of 382 per dollar on the Kazakh Stock Exchange on Friday, tracking the fall of the Russian rouble and other emerging market currencies. It is set to lose more than 10 percent this year due to weaker oil prices and a general strengthening of the dollar.
"At the moment, we expect some oil price recovery in 2019 aided, among other things, by the implementation of the OPEC and non-OPEC production cut agreement," said Eurasian Development Bank analyst Konstantin Fyodorov. "Under this scenario, the tenge exchange rate will stabilise and return to the path of gradual depreciation over the 12-month horizon, which is in line with our earlier forecasts."
Dmitry Sheikin, an analyst at Kazakh brokerage Halyk Finance, said its forecast was also based on expectations of the oil price rebound as well as the assumption that Kazakhstan will continue to manage the exchange rate against the rouble.
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