The Kazakh tenge has dropped 6.6 percent against the Russian rouble over the last six weeks, reaching a 19-year low, and traders suspected the central bank was manipulating the exchange rate to improve the balance of trade. Russia is one of Kazakhstan's biggest trading partners, accounting for 38.5 percent of its imports and 9.5 percent of its exports.
The tenge rose to record high 2.57 per rouble in early 2015, when it was pegged to the dollar, while the rouble plummeted along with oil prices. It fell after Kazakhstan, also an oil exporter, floated the currency in August 2015, and it has since continued to weaken against the rouble. The tenge began sliding faster in August, while rouble trading volume on the Kazakh Stock Exchange surged to a two-year high. It closed at 5.93 tenge per rouble on Wednesday, near the 5.94 per rouble reached earlier this month, its lowest since 1998.
The rush to buy roubles was largely driven by speculation the central bank was doing the same to improve the balance of trade with Russia, a local trader said, speaking on condition of anonymity because he was not authorised to comment. A Kazakh analyst agreed, saying the central bank was selling tenge against the dollar and the rouble into every oil rally.
Kazakhstan's deficit in mutual foreign trade widened to $3.6 billion in January-July 2017 from $2.8 billion in the same period of the previous year. A weaker tenge could in theory make the terms of trade more favourable for Kazakhstan. But the central bank said this month it was a net seller of foreign currency in August, by $70 million.
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