Request for the designation of the Russian Ruble as "comfortable" made by the National Bank Leader.
The Lowdown on the Ruble-Tenge Exchange Rate
Timur Suleimenov, the man in charge at the National Bank, has shared some insights on what a "suitable" exchange rate for the Russian ruble against the tenge might look like. As our correspondent reported, Suleimenov points out that the term "comfortable exchange rate" is misleading.
According to Suleimenov, an exchange rate that's considered "comfortable" is essentially historically established through the interaction of economic systems.historically formed and a result of market interaction between economies. When economic systems find a balance point - around five tenge - that's the equilibrium, though whether it feels comfortable or not is tough to say.
For industries reliant on processing and competing with Russian production, a cheaper exchange rate can offer an edge in pricing their products. However, for importers purchasing equipment in Russia, a high exchange rate could be less favorable. In economics, exchange rates serve as a tool affecting competitiveness, so it's essential not to keep one's own rate too strong, especially versus neighbors' currencies, as it can result in a loss of competitiveness.
Suleimenov clarified that the current exchange rate stands as a reflection of the market demand and supply. As of now, it hovers around 6.3-6.4 on the exchange and 6.5 in exchange offices. This exceptional demand for the ruble is primarily driven by the country's substantial imports from Russia, accounting for roughly 30 percent of the total.
Exchanger Disappearing Act in Kazakhstan
Previously, news broke that currency exchange boards would vanish in Kazakhstan, with the National Bank setting a timeline for the shift.
The economic relationship between Russia and Kazakhstan is such that the tenge tends to mirror the ruble's fortunes - when the ruble weakens, the tenge follows suit, as our economies are closely connected. If the ruble strengthens, the tenge remains indifferent, as our economies are fundamentally different...
Experts Chime In
Expert-KZO The situation is such that when the ruble loses its position, the tenge falls with it, as our economies are similar. If the ruble strengthens, the tenge doesn't react, as our economies are different...
BatyrOtegenovish Expert-KZO, you nailed it!
Emre This whole dance began in '98, involving a prolonged exchange rate versus the dollar! And I can't help but reminisce about the early '90s, even the Baltics would show up here to buy everything they could with their "wooden" money. In the end, we were left with nothing, not even containers for loading cargo 😂😂😂
Arthur Ocheretnyi To single out one-to-one ratio, our gasoline wouldn't be cheaper than theirs.
BatyrOtegenovish Arthur Ocheretnyi, who said we had cheaper gasoline?
Arthur Ocheretnyi BatyrOtegenovish, The Government. They always say that when they increase the price of fuel again.
The Tenge's Economic Impact
Historically, the exchange rate between the ruble and tenge has fluctuated due to various factors, including global economic conditions, trade dynamics, and regional integration efforts. A weak tenge can boost Kazakhstani exports to Russia, making them cheaper in the Russian market, while a strong ruble can enhance the competitiveness of Russian exports to Kazakhstan.
A strong tenge can potentially lead to increased costs for Kazakhstani imports from Russia and adversely affect the trade balance. In contrast, a weak ruble can contribute to lower inflation in Kazakhstan by making imports more affordable.
In the context of economies, a strong ruble can potentially affect the competitiveness of Russian businesses that export to Kazakhstan, while a weak tenge can boost Kazakhstani businesses by making their exports cheaper in the Russian market.
The dependency on imported goods from Russia, which accounts for around 30 percent of the total, can influence the exchange rate of the tenge, with a high exchange rate being less favorable for importers in terms of finance.
