Dollar may stay cheap in Kazakhstan until February, analysts say

Analysts at Freedom Broker say the US dollar may remain cheap in Kazakhstan until February. The reason is that sales of National Fund assets ordered by President Kassym-Jomart Tokayev could increase the supply of foreign currency on the exchange.

The tenge has a floating rate, so its value is set by trading on the currency exchange. The dollar's rate is also shaped by oil prices, the state of the economy, inflation expectations, speculation by foreign investors, and actions of the National Bank, including currency interventions and conversions.

In an address to the nation, Tokayev said the government would prepare an infrastructure modernisation plan, with about 6.5 trillion tenge allocated from the National Fund through the end of 2029. Analysts said the instruction could mean about 800 million dollars in extra FX sales in each of the next four months. Since the National Bank has sold 200 million dollars a month for the past five months, about 1 billion dollars in monthly sales could be expected until a strong tax period in February, which could restrain the dollar's rise.