The tenge fell 3% in October to close the month at 453.77 per dollar, and the National Bank of Kazakhstan did not conduct any currency interventions during the period, infohub.kz reports.
According to the National Bank of Kazakhstan, there were no direct interventions, but other factors may have indirectly affected the national currency. In particular, around 302 billion tenge was sterilized in October through mirror operations linked to gold purchases: the regulator sold foreign currency on the domestic market, thereby increasing its supply. This creates additional demand for the tenge and can help strengthen the national currency. In November, a further 302 billion tenge worth of foreign currency is to be sold under the gold-purchase mirroring scheme.
In addition, the National Bank bought $910 million from the National Fund in October for subsequent sale on the domestic foreign exchange market. This will increase the supply of foreign currency and may support the tenge through additional dollar supply.
Not all factors, however, worked in the tenge's favor. In October the National Bank bought $568 million in foreign currency to maintain the foreign-currency share of pension assets of the Unified Accumulative Pension Fund (UAPF). That purchase raised demand for foreign currency and may have put additional pressure on the tenge.
As for trading on the Kazakhstan Stock Exchange itself, the average daily volume in October was $397 million, with the monthly total reaching $8.4 billion.
Meanwhile, the tenge is affected not only by the National Bank of Kazakhstan's currency operations but also by other economic factors, including oil prices, the state of the economy, inflation expectations and speculation by foreign investors. Experts believe, however, that the low dollar rate may persist over the coming months, as Kazakhstan plans to implement major projects that could indirectly support demand for the tenge.