Deteriorated forecasts on the exchange rate between Tenge and Dollar, as reported by financial analysts
Kazakhstan's Tenge Exchange Rate Forecast Downgraded
Financial experts in Kazakhstan have significantly revised their forecasts for the tenge exchange rate against the dollar, citing strong volatility in the foreign exchange market, a declining trade balance surplus, and increased domestic demand for foreign currency as key factors.
The Association of Financiers of Kazakhstan (AFK) raised their one-year forecast from 548.5 to 573 tenge per dollar, indicating a further expected weakening of 24.5 tenge compared to prior forecasts.
The foreign exchange market has experienced fluctuations not supported by economic fundamentals, exacerbating uncertainty around the tenge. Meanwhile, expectations of a shrinking trade surplus reduce foreign currency inflows, putting pressure on the tenge.
Increased demand within Kazakhstan for dollars has also depreciated the tenge, as has instability in commodity markets, which are critical for Kazakhstan's export revenues. Rising inflation forecasts—from 10.4% to 11.3% for the coming year—reflect concerns over tax hikes, increased business costs, and higher import prices.
To combat inflationary pressures, the central bank is expected to maintain tight monetary policies, including raising the base interest rate from 14.75% to 15.25%. This move is hoped to sustain a positive real interest rate and stabilize the currency.
Supporting events include the prime minister’s announcement revising the government base forecast for the USD-KZT rate from 475 to 540 by 2026, which likely affected market sentiment and contributed to the downgrades and depreciation observed in July 2025, with the tenge hitting record lows near 538.9 per dollar.
Deputy Prime Minister Sklyar has expressed a personal forecast of the dollar's exchange rate retreat, but most analysts predict that the base rate in Kazakhstan will not be raised in the near future. The Brent oil barrel is expected to cost $66.5, down from the current $67.
Analysts do not forecast a significant drop in the dollar's exchange rate against the tenge due to the current situation. The chief analyst of AFO does not expect the ruble's exchange rate to drop to 5 tenge unless there is a serious crisis in Russia.
Ongoing uncertainty in US trade policy is putting pressure on oil prices, contributing to the deteriorated outlook. The expected decline in trade surplus is another factor contributing to the downgrade.
In conclusion, the downgrade reflects macroeconomic challenges, external commodity market uncertainties, domestic policy reactions to inflation, and market psychology influenced by official communication, all contributing to a bearish outlook for the tenge exchange rate.
The Association of Financiers of Kazakhstan (AFK) raised their one-year forecast for the dollar's exchange rate against the tenge, predicting a further weakening of the tenge against the dollar. Analysts do not foresee a significant drop in the dollar's exchange rate against the tenge due to the current situation, but the chief analyst of AFO does not rule out the possibility of the ruble's exchange rate dropping to 5 tenge if there is a crisis in Russia.
