The Kazakh tenge fell to a weighted average of 342.36 per a dollar, its lowest in 11 months, on the Kazakhstan Stock Exchange on Tuesday, from 341.24 the previous trading day. The oil-exporting Central Asian nation's currency has been volatile since August, prompting the central bank to intervene both in August and September by selling foreign currency on the domestic market, although such sales were relatively small.
Analysts attributed the tenge's latest bout of weakness to the Russian rouble's slide on Monday which in turn was prompted in part by weaker oil prices. Because of the time zone difference, markets in Russia close later than those in Kazakhstan and the tenge often reacts to the rouble's previous-day performance.
"We think that the tenge looks undervalued," said Aivar Baikenov, managing director of investment firm Kazkommerts Securities. Baikenov said both external and domestic fundamentals were favourable for the tenge, with Brent crude near $56 per barrel and Kazakhstan's economic growth accelerating.
"What we see is a bear run provoked by the tenge's initial weakening in late July and little action from the central bank which allowed further speculative movement." Baikenov said the tenge was unlikely to weaken much further and could rebound to 325-330 per dollar.
Murat Temirkhanov, head of research at Halyk Finance, another Kazakh investment firm, said the tenge appeared to have stabilised against the rouble. Russia is Kazakhstan's biggest trading partner and Kazakhstan's deficit in mutual 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.
Comments
Comments are closed.