According to analysts at Halyk Finance, the current strengthening of the tenge is temporary. By the end of the first quarter, the dollar fell to 478 tenge, but Halyk Finance considers the exchange rate 'overvalued.'
'It deviated from the fundamentally justified level. The tenge was supported by a high base rate, suspension of currency purchases for the Unified Accumulative Pension Fund, mandatory sale of foreign currency earnings by quasi-state companies, and an inflow of foreign investment into government bonds. In addition, there were large volumes of currency supply on the exchange from unknown sources,' the report said.
Several factors could weaken the tenge by the end of the year, according to Halyk Finance's forecast: high inflation, narrowing trade surplus, cooling foreign interest in government bonds, dollar strengthening in global markets, and reduced currency sales from the National Fund.
Kazakhstan's economy grew by only 3% in the first quarter, compared to 5.6% a year earlier. The main reason for the decline is that oil production fell by almost 20%. Analysts expect growth of 4.8% for the full year. Inflation by the end of the year, according to their forecast, will remain in the range of 10.5–11.5%. Prices will be driven up by the lifting of the moratorium on utility tariff increases and rising fuel prices.
Earlier, it was reported that Kazakhstani citizens significantly cooled their interest in buying cash dollars in March. Net purchases at exchange offices amounted to 106.6 billion tenge, which is 22% less than in February. At the same time, demand for cash rubles, on the contrary, increased sevenfold, although the ruble was weakening against the tenge at that time.
