Kazakh National Bank has no plans to abandon free floating exchange system
NUR-SULTAN. Sept 27 (Interfax) - The National Bank of Kazakhstan is not returning to a fixed exchange rate of the national currency, Kazakh National Bank Monetary Policy Department Director Vitaly Tutushkin said.
"We've come a long way towards a free-floating system to simply abandon it now. A free floating tenge offers many advantages, including absorbing shocks, especially from outside markets. We are still a commodity economy that depends on external market conditions," Tutushkin said in an interview with Interfax.
Tutushkin noted that the transition to a fixed exchange rate would adversely affect the production of commodities and domestic prices. "Switching to a fixed exchange rate is not even an item on the agenda," Tutushkin said.
The National Bank of Kazakhstan could still conduct currency interventions and influence the exchange rate, but "only in emergencies, when tenge fluctuations can undermine the financial stability of Kazakhstan."
Earlier, Rakhim Oshakbayev, a member of the National Council of Public Confidence, had asked Kazakh President Tokayev to consider abolishing the floating exchange rate, citing high devaluation expectations and benefits reaped by the banking system only.