Kazakhstan’s central bank devalued the national currency by 18.9 percent Tuesday in an effort to prevent the destabilization of the country’s economy.

The oil-rich Central Asian state will keep the tenge at a rate of 182-188 to the US dollar, Kazakhstan’s National Bank said in a statement. The official rate of the tenge was 155.56 to the dollar Monday.

Kazakhstan will ease support for the national currency and reduce interventions on the market, the Almaty-based bank said. In recent years, Kazakhstan had maintained the tenge’s value at 145-155 per dollar.

The bank said Kazakhstan is deeply integrated in the global economy and cannot ignore the current situation on the world financial and commodity markets.

“As a result of the exchange rate adjustment, competitive conditions will improve for domestic goods and entrepreneurs working in export and import-substituting spheres of the economy in Kazakhstan,” the statement said.

The devaluation of the tenge follows the weakening of the ruble, which last month fell to its lowest level against the dollar since March 2009, before regaining ground to stand at 34.76 rubles to the dollar Tuesday.

Russia’s central bank, which controls the value of the ruble through interventions on the currency market, has repeatedly widened the target trading band for the ruble in recent months. The bank has said it plans to move toward a free floating ruble by the end of this year.

A weaker ruble means larger profits for Russian exporters and a windfall for the state budget, which is dependent on revenue from commodity exports.

 

RIA Novosti